Business Cycle, Recessions, and Depressions

It is tough for economists to predict the business cycle because businesses and households are constantly in a "tug of war" which means they are making plans based on how much they expect their wages and sales to increase (2 Ip). There are two different types of markets there is a Bull Market and a Bear Market. A Bull market is when economic activity is in a long term climb. Unemployment throughout the country is usually low during a Bull Market. A Bear Market is when economic activity is decreasing. High unemployment rates tend to happen more during a Bear Market. (3 Ip). The causes of economic patterns differed through history in the 1920's it was the stock market that crashed. In the 1970's and the 1990's it crashed due to a spike in oil prices. During the early 2000's it crashed from technology. Later during the mid 2000's it crashed due to a housing bubble. A recession is two consecutive quarters of declining GDP. A recession does not always become a depression, but when a recession does become a depression it usually occurs when the "bungee snaps" which means the economy stays at rock bottom for a while. (5 Ip).