M E A N I N G A N D P H A S E S O F B U S I N E S S C Y C L E S

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Business life cycle

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M E A N I N G A N D P H A S E S O F B U S I N E S S C Y C L E S

  1. 1. MEANING AND PHASES OF BUSINESS CYCLES<br />
  2. 2. * Syed Sibtain* TayyebaDilgeer<br />* Vartika Gupta * Shelley Sharma<br />* NazishMufti * Mushfiq Hussain<br />
  3. 3. Relating Business Cycle To Romance Cycle<br />“You look good. You look verrrry good.”<br />Wedding Marchfor women<br />Death March for men<br />You decide to<br />get married<br />Gets engaged<br />But with education<br />a job is gained as<br />well as a new house<br />1st<br />date<br />You become a<br />happy family<br />Must have good “meeting <br />line” to get the first date.<br />Jealousy sets in<br />One loses a job<br />Baby-5 months later<br />But – he does nothing but make <br />loud noises atone end, and has<br />no discipline at the other end.<br />She goes off <br />to college.<br />He uses the meeting line on <br />unsuspecting freshmen girls<br />
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  5. 5. Is like a roller coaster it has it’s ups and downs.<br />These ups and downs are called Business Cycle.<br />The Business cycle brings the good and the bad times.<br />
  6. 6. THE BUSINESS CYCLE<br /><ul><li>The Business cycle has four parts:
  7. 7. Expansion
  8. 8. Peak
  9. 9. Recession
  10. 10. Trough</li></li></ul><li>Expansion<br />Expansion<br />Recession<br />Boom<br />Peak<br />Upturn<br />Downturn<br />Total Output<br />Secular growth trend<br />Trough<br />0<br />Jan.-<br />Mar<br />Apr.-<br />June<br />July-<br />Sept.<br />Oct.-<br />Dec.<br />Jan.-<br />Mar<br />Apr.-<br />June<br />July-<br />Sept.<br />Oct.-<br />Dec.<br />Jan.-<br />Mar<br />Apr.-<br />June<br />PHASES OF BUSINESS CYCLE<br />
  11. 11. EXPANSION<br /><ul><li>A speedup in the pace of economic activity.</li></ul>Demand, output, employment and income are at a high level.  <br />They tend to raise prices.  <br />The increase of profit and the prospect of its continuance commonly cause a rapid rise in stock market values.<br />
  12. 12. PEAK<br />The peak may lead the economy to over full employment and to inflationary rise in prices.  <br />Symptom of the end of the prosperity phase and the beginning of the recession.  <br />The seeds of recession are contained in the boom in the form of strains in the economic structure which act as brakes to the expansionary path. <br />
  13. 13. RECESSION<br />Recession starts when there is a downward descends from the ‘peak’ which is of a short duration.  <br />It marks the turning period during which the forces that make for contraction finally win over the forces of expansion. <br /> Its outward signs are liquidation in the stock market, strain in the banking system.<br />
  14. 14. TROUGH<br />Recession leads to depression when there is a general decline in economic activity.<br />There is considerable reduction in the production of goods and services, employment, income, demand and prices.  <br />The general decline in economic activity leads to a fall in bank deposits.<br />
  15. 15. THEORIES OF BUSINESS CYCLE<br />Endogenous theories<br />Monetary theory<br />Over-investment theory<br />Under-consumption theory<br />Psychological theory<br />
  16. 16. THEORIES OF BUSINESS CYCLE<br />Exogenous theories<br />Sunspot theory<br />War theory <br />
  17. 17. ENDOGENOUS THEORIES<br />
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  22. 22. EXOGENOUS THEORIES<br />
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  25. 25. SUMMARY<br />
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  30. 30. (TROUGH)<br />(Expansion)<br />
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  42. 42. For any Queries & Suggestions <br /> please contact<br />shahsibtain@gmail.com<br />

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