Chapter 12 3. Is the business cycle long term or short term in nature and which business cycle phase is typically the shorter of the two phases? Short-term and the 'recession I contraction' phase is typically the shorter of the two phases. 4. What do you call a macroeconomic indicator that typically begins to change its direction of growth before an economy enters a new business cycle phase? What do you call one that typically switches into a new phase at around the some lime as the business cycle switches into a new phase? 1) A leading indicator: begins to change its direction of growth before an economy enters a new business cycle phase 2) A coincident indicator: around the same time... 3) A lagging indicator: After