Questions+Pg.+316

1. A contraction can lead the economy into a depression. This is when the economy starts to fall and so does the GDP 2. Interest rates can push a business cycle into a contraction by driving the price of things up which makes no one want to buy anything and the economy will suffer. 3. The stock market is a leading indicator because typically before a recession the stock market turns sharply downwards. 4. The Great Depression convinced economists that that modern market economies could fall into long lasting contractions. 5. I would prefer top be at the trough because you can improve a lot and at the peak you are at the highest point and there is no way to improve. 6. SKIP