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  • Hey hun, so bad news. I lost my job.
  • Oh no! We knew this was possible though because of the virus happening at the moment.
  • A contraction is when the economy is on a decline which means the unemployment rate is increasing and the economy is spending less money, which could lead to a job cut.
  • We are going through a contraction.
  • Hey kiddo, I got fired from my job today because of the virus going around.
  • Why is mom so stressed out? And what is a contraction?
  • I understand it seems tough right now but its all part of the business cycle. I think things will only get better from here because we are in a trough.
  • A trough is a signal that we are reaching the end of a decline in the economy such as the unemployment rate. Soon enough it will start lowering down and more jobs will be available.
  • My salary just got cut! I know this virus stuff is getting serious but everyone I know is losing their jobs and I don't understand why.
  • That's amazing and I got my normal salary back!
  • 3 months later...
  • I have amazing news! I just got a new job that pays even more than my last job.
  • I told you things will get better! Its all part of the business cycle. We had to hit rock bottom in order to continue to expansion which is the next part. This means that the economy is on an incline. The unemployment rate is dropping and the GDP is rising.
  • A peak is the part of the business cycle that pretty much means that you are at the top of the economy in a way that the unemployment rates are at a low and the GDP is at an high.
  • This is great. We went from stressing about making each payment to sitting comfortably. I think its safe it say we have reached the peak.
  • Listen to this, I just got a raise at my work!!!
  • The Business Cycle
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