Ch 9: The Business Cycle & Economics

About This Chapter

Review the short lessons in this chapter to strengthen your knowledge of the business cycle and economics. Take self-assessment quizzes and a chapter exam to assess your understanding and enhance your ability to earn course credit or excel on an upcoming test.

The Business Cycle & Economics - Chapter Summary

This fun and engaging examination of the business cycle and economics ensures you understand economic fluctuations, market failure, macroeconomic equilibrium and much more. Explore the entertaining lessons from home or on-the-go using any computer or mobile device to learn about these topics or refresh your knowledge. Expand your understanding or clarify details you don't fully comprehend by sending lesson topic questions to our experts. At any time, feel free to test your grasp of this chapter by taking multiple-choice quizzes and a practice exam. When you're finished, you will be ready to do the following:

  • Compare and contrast the Keynesian classical models of the economy
  • Discuss the Keynesian Revolution as it relates to fiscal policy
  • Define the dominant model used to explain economic fluctuations
  • Differentiate between aggregate supply and aggregate demand
  • Explain what happens to an economy at equilibrium in the long run and short run
  • Describe the macroeconomic models that can face failure
  • Share the definition and causes of market failure

6 Lessons in Chapter 9: The Business Cycle & Economics
Test your knowledge with a 30-question chapter practice test
The Keynesian Model and the Classical Model of the Economy

1. The Keynesian Model and the Classical Model of the Economy

Economists use two basic models to describe economic growth. In this lesson, you'll find out more about each one of these models using real-world examples. So buckle up your seatbelts!

Fiscal Policy: The Keynesian Revolution

2. Fiscal Policy: The Keynesian Revolution

In this lesson, you'll learn how the government uses stabilization policy to smooth out the ups and downs of the business cycles. In stark opposition to the Classical approach, this Keynesian approach favors taking immediate action to stabilize a troubled economy.

Economic Fluctuations: Definition & Model

3. Economic Fluctuations: Definition & Model

Economies go up, and economies go down. In this lesson, you'll learn about economic fluctuations, including what they are as well as look at the dominant model.

Understanding Aggregate Supply & Demand

4. Understanding Aggregate Supply & Demand

In this lesson, we explore aggregate supply and aggregate demand. In addition, we discover how economists represent these terms on a graph, using the AS/AD model.

Macroeconomic Equilibrium: Definition, Short Run & Long Run

5. Macroeconomic Equilibrium: Definition, Short Run & Long Run

This lesson will take a look at what happens to an economy at equilibrium in the short run and the long run. We'll take a look at some graphs of recessionary and inflationary gaps, and discuss what producers do in reaction to economic changes.

Market Failure: Definition & Causes

6. Market Failure: Definition & Causes

When the market for a given good or service fails to efficiently allocate the resources and utility of that market, it's called market failure. In this lesson, we'll explore some of the main reasons for market failure.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.