In Which Quarter of Which Year Did the Prosperity Phase

question 35

Essay

In which quarter of which year did the prosperity phase of the business cycle begin?
$$\begin{array} { c c } \text { Year } & \text { CPI } \\2015 & 100.0 \\2016 & 105.0 \\2017 & 112.5 \\2018 & 124.3 \\2019 & 141.6 \\2020 & 148.3 \\2021 & 151.2 \\2022 & 152.0 \\2023 & 152.3 \\2024 & 151.8 \\2025 & 150.0 \\2026 & 145.9\end{array}$$

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Definitions:

Economic Profits

Profits calculated by deducting both the explicit and implicit costs from the total revenues, differing from accounting profits by considering opportunity costs.

Long-run Equilibrium

A state in an economy or market where all factors of production are fully employed, and supply equals demand, resulting in stable prices and output.

Competitive Price-searcher Market

A market where firms set their own prices due to product differentiation and search costs but still face competition from other firms.

Competitive Price-searcher

A market condition where firms set their prices based on the search and competition among them, yet they have some control over their prices because their products are differentiated.