Business Cycles
Chapters in this video
- 0:00 The business cycle definition and why it matters
- 1:30 Recession versus depression: 6 months versus 18 months
- 2:56 The TEPC cycle: trough, expansion, peak, contraction
- 4:46 Peak GDP trap and stage-by-stage human behavior
- 5:17 Markets, bonds, and Federal Reserve policy timing
- 6:07 Rapid-fire exam recap
What this video covers
- The exact duration thresholds: a recession requires 2 consecutive quarters (6 months) of declining gross domestic product (GDP), while a depression requires 6 consecutive quarters (18 months)
- The four stages of the business cycle in order: Trough, Expansion, Peak, Contraction (TEPC), and "bottom, up, top, down" as a memory aid
- Stage characteristics for unemployment, inflation, interest rates, and consumer demand at each point in the cycle
- The peak GDP trap: at the peak, GDP is still positive and at its highest level; negative GDP only begins after the peak, during contraction
- Why stock prices tend to lead the business cycle, and what that forward-looking behavior means for portfolio adjustments
- How bond prices move inversely to interest rates, and why the Federal Reserve raises rates during expansion (contractionary policy) and lowers them during contraction (expansionary policy)
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete Series 65 course also includes adaptive practice questions and spaced-repetition flashcards, free through December 31, 2026.