business cycle

522 Words2 Pages
bulb-icon

Recommended: Effects of a business cycle

The business cycle is defined as the periodic fluctuations in economic activity which is measured by the changes in real GDP. The amount of economic activity depends on factors such as how much is invested by entrepreneurs towards their business, the quality of technology used by the entrepreneur, the policies which the government incorporate etc. Gross Domestic Product measures this economic activity. It is the total value of all of the goods and services produced by all of the businesses in a country. When GDP increases over time, this signifies greater economic activity, this is called economic growth. There are four stages of the business cycle- boom, recession, slump, recovery.

A boom is a period of relatively rapid economic growth. During a boom, the level of economic activity increases with the increase in factors such as consumer expenditure, investment, export earnings etc. Unemployment will be the lowest compared to the other stages of this business cycle as growth in the economy will create new job opportunities. Also, the consumer and business confidence will b...

Show More
Related

  • ECN 440 Term Paper

    847 Words  | 2 Pages

    2007-2008-2009 global financial crisis - many people compared to the experience to another large scale depression - now coined “great recession”

    Read More

  • The Pros And Cons Of Macropoland

    719 Words  | 2 Pages

    In conclusion, regardless of Macropoland’s current economic condition, it is fair to say that it is all part of the business cycle. The business cycle has three parts: peak, trough, and peak. The peak is the date that the recession starts. In Macropoland’s case, the peak would be at the beginning of 1973, its trough somewhere between 1973 and 1974, and then its peak again at 1974. In the second scenario, Macropoland is either at its trough, where it is about to head up again because of its low inflation rate, or it is at its expansion, on its way to heading to its next peak.

    Read More

  • The Stock Market In The 1920's

    944 Words  | 2 Pages

    Additionally, during the boom period of the roaring twenties, many people immigrated to Canada and found work in factories. Since many businesses were forced to close down due to a lack of demand and a surplus in supply, there was an even larger sum of unemployed individuals. This domino effect ultimately resulted in an unfortunate cycle. Due to the significant increase in unemployment rates in factories, many families had less revenue coming into their household. This meant that they were unable to spend their money on goods and services provided by companies.

    Read More

  • The Boom of US Economy in the 1920's

    462 Words  | 1 Pages

    = Mass production was also a key factor in the Boom. The new use of 'assembly lines' meant that production was far cheaper and faster. The first to start using this technology was Henry Ford, a car manufacturer. By 1925, Ford was producing one car every ten seconds, this meant more profit for America, and many jobs were available for people to work doing one job on the assembly line.

    Read More

  • The Roaring Twenties Was a Period of Great American Prosperity Build

    656 Words  | 2 Pages

    To start off, the economy boom was when many Americans came to the peak of their financial gains. Because of Americas new founded wealth, americans citizens used their new extra money on entertainment. Prohibition caused economic growth due to the illegal selling and using of liquor. More jobs became open to all people and wages, and hours increased making it easier for people to have a satisfying living. Child labor laws made restrictions on the age, and how much a child could work, and this made people way more relaxed about factory workers. Loans were an easy way for people to be able to achieve their goals during this period of time. Along with loans, credit was a way for people to use money that they may not have at the time and then pay it back to the bank later, thus the economy became very powerful coming out of the Great Depression. All of these factors led to...

    Read More

  • The 2008 Economic Recession

    1050 Words  | 3 Pages

    Between January 2008 and February 2010, employment fell by 8.8 million, the largest decline in American history. The 2008 Recession, which officially lasted from December 2007 to June 2009, began with the bursting of an 8 trillion dollar housing bubble. Job losses during the recession meant that family incomes dropped, poverty rose, and people all over the country were suffering. Things like this don’t just happen. Policy changes incorporated with the economy are often a major factor. In this case, all roads lead to one major problem: Deregulation. Deregulation originating from the Carter and Regan Administrations, combined with a decrease in consumer spending, and the subprime mortgage bubble all led up to the major recession of 2008.

    Read More

  • Pfizer Macroeconomic Forecast

    1533 Words  | 4 Pages

    There are very many different economic indicators that are used to analyze economic activity of a company, industry, country, or region. There are three different general trends (directions for prices or rates) in the economy. "Those with predictive value are leading indicators; those occurring at the same time as the related economic activity are coincident indicators; and those that only become apparent after the activity are lagging indicators. Examples are unemployment, housing starts, Consumer Price Index, industrial production, bankruptcies, GDP, stock market prices, money supply changes, and housing starts also called business indicators." (http://www.investorwords.com/1643/economic_indicator.html)

    Read More

  • The Wealthy In The 1920s

    652 Words  | 2 Pages

    Mass Production reduced consumer costs and produced goods at a quicker rate, making items less expensive and businesses more profitable (WWI and Prohibition). The rich also bought into the Stock Market with hopes of making it big. The returns in the stock market only benefited the wealthy because less than 1% of Americans owned stock (Roaring Twenties, History). The economic boom lead to increased production of goods, which then lead to the creation of more jobs, which all equaled high profits. The boom is defined as being a time that involves economic and technological growth within the U.S. During the 1920’s, thanks to the economic boom, the nation’s wealth doubled (WWI and Prohibition). Most people were moving into cities and away from the farm, causing farmers to go into debt and making the rich richer and the poor poorer. Farmers were going through tough times because there wasn't a demand for products and prices of crops were

    Read More

  • Economic Conditions of the Australian Economy

    661 Words  | 2 Pages

    Over the past five years the Australian economy has gone through many changes experiencing both the peaks and troughs associated with business cycle.

    Read More

  • Monetary Policy

    1670 Words  | 4 Pages

    “Microeconomics and macroeconomics can be described in terms of small-scale vs. large-scale or in terms of partial vs. general equilibrium. Perhaps the most important distinction, however, is in terms of the role of equilibrium. While issues in microeconomics seldom challenge the notion of a naturally occurring equilibrium, the existence of business cycles and, especially, unemployment suggests too many observers that macroeconomics raises issues of a different character.” (McConnell & Brue, 2004).

    Read More

  • The Economic Boom of the 1920s

    760 Words  | 2 Pages

    The boom began as a result of circumstances largely irrelevant to the general American population, but once set in motion the machine was driven by the people. People had the time and money to buy goods and invest in the economy, which boomed; so unemployment fell and wages rose. More people were employed and had money, which they used to buy consumer products, which then continued to fuel the booming economy. Therefore the main reason for the boom in the 1920s was the increased accessibility of consumer products, and the subsequent empowerment of the consumers. The boom in the 1920s marked the birth of mass market and the consumer-driven economy.

    Read More

  • The Boom in the United States in the 1920's

    330 Words  | 1 Pages

    More factors that contributed to the boom were confidence, mass technologies, advertising, chain stores and big mail order companies. All these helped contribute to the boom as there were lots more products available and they were cheaper, this then made then affordable for everyone. People had more confidence in new products as they were so rich and willing to take a risk. Advertising showed all Americans what was available. Chain stores allowed people to buy things regardless where they lived as there was always a shop in that area.

    Read More

  • Property Valuation

    2320 Words  | 5 Pages

    bust to boom: [LONDON 1ST EDITION]. Financial Times, April 8, http://www.proquest.com/ (accessed May 13, 2011).

    Read More

  • Macroeconomic Impact on Business Operations

    1602 Words  | 4 Pages

    Money supply is the availability of money in the hands of the public (economy) that can be used to purchase goods, services and securities. In macroeconomics, the price of money is equivalent to the rate of interest. There's an inverse relationship between money supply and interest rates. As money supply increases, interest will decrease. On the other hand, interest will increases as money supply decreases. It is very important to understand that the economy works at market equilibrium. There are several factors affecting money supply; and these contributing factors will be the main focus of this paper. Understanding the basic principle on money supply is imperative to have a good grasp on the macroeconomic impact of money supply on business operations.

    Read More

  • Business Forecast

    1434 Words  | 3 Pages

    This Paper examines and compares various forecasting techniques used for qualitative and quantitative business forecasting and their use in Firstlogic Inc., to forecast the demand under conditions of uncertainty. Time series and Delphi forecasting methods are considered for this research to evaluate their ability to make effective decisions regarding the future.

    Read More

More about business cycle

Open Document