Business Cycle Lesson Plan

Instructor: Kevin Newton

Kevin has edited encyclopedias, taught middle and high school history, and has a master's degree in Islamic law.

Your students will find that the business cycle helps them understand economic theories with much more ease after this lesson plan. Technical definitions, impacts on GDP and unemployment, as well as graphs are covered.

Lesson Objectives

By the end of this lesson, your students will be able to:

  • Describe and discuss the basics of the business cycle
  • Analyze its impact on businesses


  • 60-90 minutes

Curriculum Standards


Determine the meaning of words and phrases as they are used in a text, including vocabulary describing political, social, or economic aspects of history/social science.


Integrate quantitative or technical analysis (e.g., charts, research data) with qualitative analysis in print or digital text.

Key Terms

  • Business Cycle
  • Expansion
  • Peak
  • Recession
  • Trough


  • Start by asking students what they think makes businesses grow. What about shrinking? Is growth always good?
  • Discuss for a few minutes then introduce the video lesson: The Business Cycle: Economic Performance Over Time
  • Pause at 0:40. Make sure that students understand that the business cycle involves looking at the economy as a whole, not necessarily as individual businesses. Another word for this is aggregate.
  • Resume the video, pausing again at 3:43. Discuss:
    • What happens when an economy is in expansion? What are some other examples of this? Why do you think that investors are so eager to find out when the business cycle is at a peak?
  • Resume the video, pausing again at 5:54. Ask:
    • What happens when an economy is in recession? What are some examples of this? Likewise, why do you think that some investors want to know when an economy is about to leave a trough?
  • Pause again at 8:06. Discuss:
    • What is the technical definition of a recession? What happens to GDP, unemployment, and inflation during an expansion? What about a recession?
  • Resume the video, pausing at 10:34. Have students copy and label the business cycle graph in their notes. Make sure that they understand that the economy should always be inching upwards.
  • Play the remainder of the lesson answering any questions.

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