1. Place each scenario on your poster by writing the scenario number near the appropriate phase of the business cycle.

Peak

Contraction

Trough

Expansion

Scenarios

1. Kia invests $500,000 in new machinery in order to meet increasing demand.
2. The stock market collapses, investors lose billions.
3. Record numbers of Home owners can't afford their homes so they stop paying their mortgage which leads to home foreclosures
4. Unemployment is high
5. Many new businesses start up
6. Demand for goods and services is low
7. Firms reduce their level of production
8. Lots of investment is occurring
9. Firms are not fully utilizing their resources
10. Many businesses close down
11. Wages increase
12. Business confidence is high