Essay on Business Cycle

Submitted By AshleyBamm1
Words: 593
Pages: 3
Open Document
November 6, 2012
The Business Cycle
Recession
This when the economy slows down. 2 consistent quarters of negative GDP. Leading to decline in purchasing, increase in unemployment also closing in business. Few taxes are collected during the recession, gov’t. has less capital to provide social service (schools). Decrease in exports and construction.
Trough
The bottom of the cycle. Production and employment at their lowest. Completes recession and heads to prosperity.
Expansion
Economy begins to grow. Employment, wages, production and profit all expand. Investments are strong.
Peak
Top of the business cycle. Economy stops expanding and becomes contracting.
Economic indicators of the business cycle
Economic shows how well economy is doing. There are 3 indicators:
Leading: predicts where the economy is heading. Adjust before the economy actually experiences the change. The indicators are very important because it helps guide investors, businesses and governments to act and prepare for the change in the economy. Like when to start building houses because people wont buy houses if they think the economy will drop. Lagging: adjusts after the change has happened. It can take 2 or 3 quarters to influence the lagging indicator. Example is the unemployment rate (once the economy picks up it may take up to 6 months for the unemployment to drop.
Coincident: changes with the business cycle. For example international trade.
Government and the Business Cycle
The business cycle can individual country’s economy. Example the recession of 2008-2009 really affected the United States and caused many of the American citizens and business their house and business go bankrupt. Canada suffered because the States were not buying exports from Canada. The 2009 budget show the gov’ts influence on the business cycle. Things like $12 billion on improvements (roads, internet access, health records), $7.8 billions to build quality houses and $200 billions for consumers and businesses to provide financing for investing and creating new jobs.
The united states set aside $190 billion of their $787 billion of its stimulus package to gov’t agencies which used to improve buildings, alternate energy programs, education, health care, technology improvements, and to small business.
Economics of Trade Many advantages come from trading internationally since it increases job, markets, technology, competition and variety of products.
Absolute Advantage
When a
Show More

Related Documents: Essay on Business Cycle

Walmart Business Cycle

There are 4 stages of the business cycle; they are Recovery, Peak, Recession and Trough. The Recovery stage is when the economy is growing. The peak is when the economy is as robust as it can get, The Recession is when the economy is on a decline, and jobs are lost. The trough is when the economy is at its worst point and not improving or recovering. In class we have talked about what our economy and what stage it is in. Sometimes we could be in between stages or right behind a certain stage. Or…

Words 653 - Pages 3

Evaluate fluctuations of Australia’s GDP in light of business cycle theories Essay

light of business cycle theories. Throughout the history of the Australian economy there has been constant fluctuations of the Gross Domestic Product (GDP), these fluctuations strongly affect the strength of the Australian economy at certain points in time. Fluctuations are a common part of every economy throughout the world; they occur inturn with positive or negative times of economic growth. Many economists have tried to relate these fluctuations in GDP with several business cycle theories…

Words 2121 - Pages 9

XECO2125D1 Recovered Essay

● What is the relationship between Gross Domestic Product (GDP) and the business cycle? How can you use information about the business cycle when making a decision about a large purchase? Gross Domestic Product (GDP) refers to the market value of all final goods and services that are produced in a country in a given period of time. The term, business cycle, is used to describe periods of expansions of economic activity, followed by recessions…

Words 458 - Pages 2

Changing Dynamics Of Accounting

for entertainment, education, and to make decisions. Businesses also collect, store, and manipulate information that they then rely on to make decisions. They use information to make decisions related to the planning, operation, and control of the business. Businesses design systems to facilitate collecting, storing, and reporting information. We can define a system as two or more interrelated components, functions, and/or processes interacting to achieve a goal. An information system is an organized…

Words 1172 - Pages 5

ACC 340 Week 5 Learning Team Assignment Integrate Accounting Paper

Integrated Accounting Cycle Final Report ACC/340 Integrated Accounting Cycle Final Report Integrating accounting cycles into a company’s financial life is important and can determine the success or failure of a company. Accounting cycles need to be incorporated or integrated and properly followed to make sure that data is enter correctly will benefit a company. The following report is the findings that the Learning Team A of the Accounting Information System I Class found when examining the account…

Words 1426 - Pages 6

Monetary Policy Essay

& Federal Reserve | | | The Business Cycle Economic growth tends to show a pattern as follows: an expansion of above-average growth, a peak, a contraction of below-average growth, and a trough or low-point. The troughs are followed by periods of expansion and this cycle normally repeats itself. These types of fluctuations are known as the business cycle (Economics. The Business Cycle.1999-2010). Gross Domestic Product (GDP) Because the business cycle is associated with add-on economic…

Words 613 - Pages 3

Essay on Link product and process

Linlz m anufacturing process and product life cycles Focusing on the process gives a new dimension to strategy Robert H. Hayes and Steven C. Wheelwright Although the product life cycle concept may have value for managers, its emphasis on marketing can make it inadequate for strategic planners. These authors point out that using a process life cycle can help a company choose among its vnrious manufacturing and marketing options. Using the concept of n "product- process…

Words 831 - Pages 4

Boston Consulting Group and Product Life Cycle Essay

Compare and contrast the product life cycle and Boston Consulting Group matrix as marketing tools. Comment on their relevance to marketing department in the twenty first century. Introduction Marketing simply means selling the right product at right price at the right place through right method of promotion to its customers. Pettinger stated that "Marketing is the competitive process by which goods and services are offered for consumption at a profit; this definition should be seen in the broadest…

Words 1356 - Pages 6

How To Write A Business Report 1 Essay

HOW TO WRITE A BUSINESS REPORT Why write a business report? A business report is seen by a number of executives and managers in the business. Business reports aim to convey or communicate information to very busy people in the most efficient, interesting, and straightforward manner. What to include: • Business terminology, concepts, and definitions • Inclusive language (business owner, not businessman or woman) • Full sentences that relate back to the scenario • Headings, sub-headings…

Words 846 - Pages 4

Future and Business Essay

Question Explain the different phases of the business life cycle. Discuss the challenges (2) presented at each stage of the cycle, including reasons why a business may discontinue operating. 1. Executive Summary The four different phases of the business lifecycle are the establishment phase, growth stage, maturity stage and post-maturity phase. There are challenges that each each of these stages is faced which may include challenges with goals, sales and profits. Businesses may discontinue operating…

Words 344 - Pages 2