Business cycles
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The document summarizes the business cycle, which refers to recurring periods of economic expansion and contraction. It describes the four phases of the business cycle - peak, recession, trough, and recovery - and how indicators are used to monitor shifts between phases. Examples of past recessions in the US since 1950 are provided to show how they can vary in duration and severity. The Great Depression of the 1930s is discussed as the worst economic downturn in modern history.
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The Business Cycle
The document discusses the four phases of the business cycle: peak, recession, trough, and recovery. It provides characteristics of each phase, with a peak marking the highest point of economic expansion, a recession involving a decline in GDP for at least six months, a trough being the lowest point, and a recovery beginning an upturn. Recessions on average last around 11 months, while expansions typically last about 4 years.
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The document summarizes the business cycle, which describes the typical fluctuations in economic activity between periods of growth (prosperity) and contraction (recession/depression). It discusses how the business cycle affected Canada's economy in the 1920s-1940s, including a period of post-WWI prosperity, followed by recession after the 1929 stock market crash, a long depression in the 1930s with high unemployment, and eventual recovery aided by increased production during WWII. The cycles influenced other countries through economic interdependence and have led to modern policies like unemployment insurance.
Business cycles
The document discusses the business cycle and its four phases: peak, contraction/recession, trough, and recovery. It notes that business cycles vary in duration and intensity but all go through these same phases. The peak is when economic activity is highest, followed by recession where activity declines. At the trough, activity hits its lowest point before beginning recovery. Charts show how indicators like GDP and unemployment move through the phases of a typical cycle.
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This document discusses business cycles and fluctuations. It notes that economies regularly experience periods of expansion/prosperity and contraction/recession. During expansions, investment, employment, output and incomes rise leading to economic growth. However, expansions cannot continue indefinitely and eventually reach a peak, after which a recession begins as demand falls. Recessions can deepen into depressions, with shrinking GDP, high unemployment and falling prices. Eventually, depressions bottom out and economic recovery begins, starting the business cycle again.
Business cycles
The document discusses business cycles, which are periodic fluctuations in economic activity over several months or years. A business cycle has four phases: expansion, peak, contraction (recession), and trough. Expansion involves growing output and employment until a peak of activity is reached. This is followed by a recession with declining output and employment. After hitting a low point (trough), recovery begins as the economy expands again. The causes and characteristics of each phase are described.
Business cycle
The document defines the business cycle as the periodic fluctuations in economic activity between periods of expansion and contraction. It describes the four phases of the business cycle: prosperity phase, contraction phase, depression phase, and expansion phase. Each phase is characterized by different economic conditions like levels of output, employment, spending and investment. The key question discussed is how each phase of the business cycle impacts the overall economy.
Business cycle
The document discusses business cycles, which refer to the recurring periods of expansion and contraction in economic activity over several years. It defines a business cycle as alternating increases and decreases in business activity that vary in amplitude and length. It then provides details on measuring business activity, different cycle periods, a diagram of a typical business cycle, and characteristics of different phases like peaks, recessions, troughs, and expansions. The document concludes by discussing Pepsico India's business cycle and providing a SWOT analysis.
5c business cycle
The business cycle consists of alternating periods of economic expansion and contraction. It can be modeled as a roller coaster trending upward over time. The phases include expansion, peak, contraction, and trough. A recession is a prolonged contraction, while a depression is especially long and severe. Economists debate the need for government intervention to stimulate demand during downturns.
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The document summarizes the business cycle, which describes the typical fluctuations in economic activity between periods of growth (prosperity) and contraction (recession/depression). It discusses how the business cycle affected Canada's economy in the 1920s-1940s, including a period of post-WWI prosperity, followed by recession after the 1929 stock market crash, a long depression in the 1930s with high unemployment, and eventual recovery aided by increased production during WWII. The cycles influenced other countries through economic interdependence and have led to modern policies like unemployment insurance.
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The document discusses the business cycle and its four phases: peak, contraction/recession, trough, and recovery. It notes that business cycles vary in duration and intensity but all go through these same phases. The peak is when economic activity is highest, followed by recession where activity declines. At the trough, activity hits its lowest point before beginning recovery. Charts show how indicators like GDP and unemployment move through the phases of a typical cycle.
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This document discusses business cycles and fluctuations. It notes that economies regularly experience periods of expansion/prosperity and contraction/recession. During expansions, investment, employment, output and incomes rise leading to economic growth. However, expansions cannot continue indefinitely and eventually reach a peak, after which a recession begins as demand falls. Recessions can deepen into depressions, with shrinking GDP, high unemployment and falling prices. Eventually, depressions bottom out and economic recovery begins, starting the business cycle again.
Business cycles
The document discusses business cycles, which are periodic fluctuations in economic activity over several months or years. A business cycle has four phases: expansion, peak, contraction (recession), and trough. Expansion involves growing output and employment until a peak of activity is reached. This is followed by a recession with declining output and employment. After hitting a low point (trough), recovery begins as the economy expands again. The causes and characteristics of each phase are described.
Business cycle
The document defines the business cycle as the periodic fluctuations in economic activity between periods of expansion and contraction. It describes the four phases of the business cycle: prosperity phase, contraction phase, depression phase, and expansion phase. Each phase is characterized by different economic conditions like levels of output, employment, spending and investment. The key question discussed is how each phase of the business cycle impacts the overall economy.
Business cycle
The document discusses business cycles, which refer to the recurring periods of expansion and contraction in economic activity over several years. It defines a business cycle as alternating increases and decreases in business activity that vary in amplitude and length. It then provides details on measuring business activity, different cycle periods, a diagram of a typical business cycle, and characteristics of different phases like peaks, recessions, troughs, and expansions. The document concludes by discussing Pepsico India's business cycle and providing a SWOT analysis.
5c business cycle
The business cycle consists of alternating periods of economic expansion and contraction. It can be modeled as a roller coaster trending upward over time. The phases include expansion, peak, contraction, and trough. A recession is a prolonged contraction, while a depression is especially long and severe. Economists debate the need for government intervention to stimulate demand during downturns.
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The business cycle refers to periodic fluctuations in economic activity between periods of expansion and contraction. It includes four phases: expansion, peak, recession, and trough. During expansion, economic indicators like output, employment, and incomes are increasing. At the peak, expansion stops and a recession begins, when those indicators decline. The recession worsens into a depression, with severe economic contraction. Economic activity hits its lowest point at the trough, then enters a recovery phase as the economy begins expanding again. This cyclical process repeats over the long term as aggregate demand and supply fluctuate.
Austrian Business Cycle Theory - How Government Manipulation of Interest Rate...
This presentation starts by looking at how the market process works: coordination through prices and profits.
The two alternative theories of the business cycle are introduced:
- The non-Austrian theories, which blame the cycle on the free market and call for government to take control.
- And the Austrian Theory of the Business Cycle (ABCT), which blames the cycle on government manipulation of interest rates.
The boom, bust and recession stages of the ABCT are analyzed in detail. It is concluded that government actions only prolong recessions and make them more severe. And the business cycle would not occur with interest rates determined on a free market.
Business cycle.shrikant rana
This document discusses different types of financial crises including banking crises, speculative bubbles and crashes, currency crises, and wider economic crises. It also discusses theories of the business cycle including monetary, innovation, psychological, over-saving, and over-production theories. Finally, it outlines the phases of the business cycle including prosperity, recession, depression, and recovery phases as well as features of trade cycles and types of business cycle fluctuations.
Chater 2 business cycle 22
The business cycle refers to the recurring but irregular pattern of economic expansion and contraction that occurs in an economy over time. It includes periodic increases in economic activity during expansions as well as decreases during recessions or depressions. Key aspects of the business cycle include periods of recession, depression, recovery, and expansion. The business cycle is influenced by endogenous economic factors as well as exogenous global and financial events. Governments use fiscal and monetary policy tools to try to smooth out the business cycle.
Business cycle
The document discusses the business cycle, which refers to periods of economic expansion and contraction. It describes the four phases of the business cycle according to various economists:
1) Expansion is characterized by increasing production, prices, and low interest rates.
2) Peak occurs when expansion reaches its highest level and a downward slide in economic activity begins.
3) Recession involves drops in production, prices, incomes and rising unemployment and bankruptcies.
4) Recovery happens when stock prices and incomes begin to rise again as the economy grows out of the downturn.
Business cycle
The document discusses business cycles and their phases. It notes that a business cycle involves fluctuations in various economic indicators like production, prices, employment, income and profits. There are generally considered to be four phases in a business cycle: prosperity, recession, depression, and recovery. Prosperity involves high production and employment, while recession sees a slowdown. Depression is a period of low business activity where producers lose hope. Recovery begins as governments intervene and economic activity gradually increases again. The document also reviews monetary and non-monetary theories of business cycles proposed by economists R.J. Hawtrey and J. Schumpeter.
The business cycle
The document discusses the business cycle, which refers to periodic expansions and contractions in economic activity. It describes the four phases of a business cycle as the economic boom, recession, depression, and recovery. A recession is defined as two or more consecutive quarters of declining GDP, while a depression is a more severe recession. The characteristics of each phase are also outlined, such as high output and employment in a boom and rising unemployment and falling incomes in a recession. Theories like Keynesian and real business cycle theory are mentioned as explanations for business cycles.
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Great Depression Business Cycle Notes
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The document outlines the phases of the business cycle, including expansion (recovery, boom, peak) and contraction (recession, depression, trough). Expansion involves increased economic activity and consumer confidence, while contraction is a period of decreasing activity and confidence. Key phases include recovery as activity begins to rise from a trough, boom as rapid growth occurs, peak when activity levels off, recession as activity declines, depression as the decline worsens, and trough when activity hits bottom. Factors shaping the business cycle include volatility of investment, momentum, and technological innovations.
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2) 2012 will be a significant time of historical transformations as pressures build from unresolved issues like high global debt and political unrest, similar to the 1970s-1980s.
3) TSWM will maintain a well-thought-out asset allocation plan and conservative balance to mitigate emotional decision-making as volatility increases, relying on sound portfolio principles.
Market Bubbels
The document discusses market bubbles and provides several case studies as examples. It defines a market bubble as occurring when prices reach unjustified levels and end up crashing. Several causes of bubbles are mentioned, including excessive leverage, the "greater fool theory," and lack of experience among fund managers. When bubbles burst, they can lead to economic slowdowns as disallocation of resources and spending cuts occur. The case studies examine the market crashes of 1929, the 1960s bubble, the 1987 meltdown, and the late 1990s dot-com bubble. Lessons learned are that the size of declines from bubble peaks has diminished over time, and it can take decades to regain prior market highs after a crash.
8 business cycles
The document discusses business cycles, which are alternate periods of economic prosperity and depression in capitalist economies. It provides details on the typical phases of a business cycle, including depression, recovery, prosperity, boom, and recession. Various theories of business cycles are also mentioned, such as the monetary, psychological, overproduction, innovation, and multiplier-accelerator theories. The document concludes with methods that can be used to control fluctuations in business cycles, such as monetary policy, fiscal policy, and automatic stabilizers.
Chart Of The Day: Markets Rallies
The article summarizes a chart showing that the current stock market rally that began over a year ago has gained less than average and lasted a shorter period than most major rallies according to historical data. Most rallies last between 200-800 trading days and result in gains of 30-150%, but the current rally has entered the lower range in both duration and magnitude. There is debate about whether this signals a bull market within a longer bear trend, or the start of a secular bull market, with the author agreeing with David Fuller's definition of a bear market being a period of contracting valuations rather than an outright market decline.
Business cycles
The business cycle refers to recurring periods of economic growth (expansion or prosperity phase) and contraction (recession phase) that occur over several years. There are four phases in the business cycle: peak, recession, trough, and recovery. During the peak phase, economic growth and activity are at their highest levels. The recession phase is a period of declining economic activity and rising unemployment. The trough marks the lowest point after which a recovery or expansion phase begins with renewed economic growth. Economists use indicators like unemployment claims and new orders to track and predict where the economy is in the business cycle.
Trade cycle
This document is a presentation by Geeta Malik on the topic of trade cycles. It defines a trade cycle as recurring periods of economic prosperity and recession that can last for several years. The document outlines the meaning, nature, causes and phases of trade cycles. It discusses fluctuations in trade cycles and lists the phases as boom, recession, depression, and recovery. Causes mentioned include banking operations, shifts between capital and consumer goods, purchasing power, and human psychology. The document also briefly discusses the global depression of 1929-1932 and preventive and corrective measures that can be used to control trade cycles.
3.Economic performance-business cycle-I.ppt IN 2013 BU.ppt
The document discusses business cycles and economic performance. It defines the four phases of a business cycle as prosperity, recession, depression, and recovery. It also discusses characteristics of business cycles such as they are periodic, affect entire economies, and have wave-like movements between expansion and contraction. Causes of business cycles include changes in interest rates, consumer confidence, multiplier effects, and inventory cycles. The impacts of volatile business cycles are that booms can lead to inflation while recessions represent wasted resources and unemployment.
Business cycles
The business cycle refers to recurring periods of economic growth (peak/prosperity phase) and contraction (recession/contraction phase) that can last for years. During the peak, economic growth is highest, output and employment are at their maximum levels, and inflation may be high. In the recession, economic growth declines, output and employment decrease, and unemployment rises. The cycle bottoms out in the trough/depression phase, then enters a recovery/expansionary phase where growth resumes. Economists use indicators like unemployment claims and inventory levels to track changes in the business cycle and predict economic trends.
Business Cycle .pptx
Business cycles refer to the periodic but irregular fluctuations in economic activity, measured by changes in real GDP and other macroeconomic variables. According to Hicks' theory of business cycles, cycles occur due to the interaction between the multiplier and accelerator effects in an economy experiencing economic growth. Autonomous investment increases at a constant rate equal to the growth in voluntary savings, determining the equilibrium growth rate. Fluctuations occur when actual growth deviates from the natural rate due to lags in consumption and investment responses to changes in income.
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The business cycle refers to periodic fluctuations in economic activity between periods of expansion and contraction. It includes four phases: expansion, peak, recession, and trough. During expansion, economic indicators like output, employment, and incomes are increasing. At the peak, expansion stops and a recession begins, when those indicators decline. The recession worsens into a depression, with severe economic contraction. Economic activity hits its lowest point at the trough, then enters a recovery phase as the economy begins expanding again. This cyclical process repeats over the long term as aggregate demand and supply fluctuate.
Austrian Business Cycle Theory - How Government Manipulation of Interest Rate...
This presentation starts by looking at how the market process works: coordination through prices and profits.
The two alternative theories of the business cycle are introduced:
- The non-Austrian theories, which blame the cycle on the free market and call for government to take control.
- And the Austrian Theory of the Business Cycle (ABCT), which blames the cycle on government manipulation of interest rates.
The boom, bust and recession stages of the ABCT are analyzed in detail. It is concluded that government actions only prolong recessions and make them more severe. And the business cycle would not occur with interest rates determined on a free market.
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This document discusses different types of financial crises including banking crises, speculative bubbles and crashes, currency crises, and wider economic crises. It also discusses theories of the business cycle including monetary, innovation, psychological, over-saving, and over-production theories. Finally, it outlines the phases of the business cycle including prosperity, recession, depression, and recovery phases as well as features of trade cycles and types of business cycle fluctuations.
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The business cycle refers to the recurring but irregular pattern of economic expansion and contraction that occurs in an economy over time. It includes periodic increases in economic activity during expansions as well as decreases during recessions or depressions. Key aspects of the business cycle include periods of recession, depression, recovery, and expansion. The business cycle is influenced by endogenous economic factors as well as exogenous global and financial events. Governments use fiscal and monetary policy tools to try to smooth out the business cycle.
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The document discusses the business cycle, which refers to periods of economic expansion and contraction. It describes the four phases of the business cycle according to various economists:
1) Expansion is characterized by increasing production, prices, and low interest rates.
2) Peak occurs when expansion reaches its highest level and a downward slide in economic activity begins.
3) Recession involves drops in production, prices, incomes and rising unemployment and bankruptcies.
4) Recovery happens when stock prices and incomes begin to rise again as the economy grows out of the downturn.
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The document discusses business cycles and their phases. It notes that a business cycle involves fluctuations in various economic indicators like production, prices, employment, income and profits. There are generally considered to be four phases in a business cycle: prosperity, recession, depression, and recovery. Prosperity involves high production and employment, while recession sees a slowdown. Depression is a period of low business activity where producers lose hope. Recovery begins as governments intervene and economic activity gradually increases again. The document also reviews monetary and non-monetary theories of business cycles proposed by economists R.J. Hawtrey and J. Schumpeter.
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The document discusses the business cycle, which refers to periodic expansions and contractions in economic activity. It describes the four phases of a business cycle as the economic boom, recession, depression, and recovery. A recession is defined as two or more consecutive quarters of declining GDP, while a depression is a more severe recession. The characteristics of each phase are also outlined, such as high output and employment in a boom and rising unemployment and falling incomes in a recession. Theories like Keynesian and real business cycle theory are mentioned as explanations for business cycles.
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The document outlines the phases of the business cycle, including expansion (recovery, boom, peak) and contraction (recession, depression, trough). Expansion involves increased economic activity and consumer confidence, while contraction is a period of decreasing activity and confidence. Key phases include recovery as activity begins to rise from a trough, boom as rapid growth occurs, peak when activity levels off, recession as activity declines, depression as the decline worsens, and trough when activity hits bottom. Factors shaping the business cycle include volatility of investment, momentum, and technological innovations.
Growth vs. Value Investing Cycles
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Market News 2012
The document discusses highlights for 2012 including:
1) An upward bias for stocks in the range of 1,100 to 1,550 and low bias for interest rates in the first half of 2012, though headwinds and uncertainty may arise quickly.
2) 2012 will be a significant time of historical transformations as pressures build from unresolved issues like high global debt and political unrest, similar to the 1970s-1980s.
3) TSWM will maintain a well-thought-out asset allocation plan and conservative balance to mitigate emotional decision-making as volatility increases, relying on sound portfolio principles.
Market Bubbels
The document discusses market bubbles and provides several case studies as examples. It defines a market bubble as occurring when prices reach unjustified levels and end up crashing. Several causes of bubbles are mentioned, including excessive leverage, the "greater fool theory," and lack of experience among fund managers. When bubbles burst, they can lead to economic slowdowns as disallocation of resources and spending cuts occur. The case studies examine the market crashes of 1929, the 1960s bubble, the 1987 meltdown, and the late 1990s dot-com bubble. Lessons learned are that the size of declines from bubble peaks has diminished over time, and it can take decades to regain prior market highs after a crash.
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The document discusses business cycles, which are alternate periods of economic prosperity and depression in capitalist economies. It provides details on the typical phases of a business cycle, including depression, recovery, prosperity, boom, and recession. Various theories of business cycles are also mentioned, such as the monetary, psychological, overproduction, innovation, and multiplier-accelerator theories. The document concludes with methods that can be used to control fluctuations in business cycles, such as monetary policy, fiscal policy, and automatic stabilizers.
Chart Of The Day: Markets Rallies
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The business cycle refers to recurring periods of economic growth (expansion or prosperity phase) and contraction (recession phase) that occur over several years. There are four phases in the business cycle: peak, recession, trough, and recovery. During the peak phase, economic growth and activity are at their highest levels. The recession phase is a period of declining economic activity and rising unemployment. The trough marks the lowest point after which a recovery or expansion phase begins with renewed economic growth. Economists use indicators like unemployment claims and new orders to track and predict where the economy is in the business cycle.
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The business cycle refers to recurring periods of economic growth (peak/prosperity phase) and contraction (recession/contraction phase) that can last for years. During the peak, economic growth is highest, output and employment are at their maximum levels, and inflation may be high. In the recession, economic growth declines, output and employment decrease, and unemployment rises. The cycle bottoms out in the trough/depression phase, then enters a recovery/expansionary phase where growth resumes. Economists use indicators like unemployment claims and inventory levels to track changes in the business cycle and predict economic trends.
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Business cycles refer to the periodic but irregular fluctuations in economic activity, measured by changes in real GDP and other macroeconomic variables. According to Hicks' theory of business cycles, cycles occur due to the interaction between the multiplier and accelerator effects in an economy experiencing economic growth. Autonomous investment increases at a constant rate equal to the growth in voluntary savings, determining the equilibrium growth rate. Fluctuations occur when actual growth deviates from the natural rate due to lags in consumption and investment responses to changes in income.
CA NOTES ON BUSINESS ECONOMICS
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The document outlines the phases of the business cycle, including expansion (recovery, boom, peak) and contraction (recession, depression, trough). Expansion involves increased economic activity and consumer confidence, while contraction is a period of decreasing activity and confidence. Key phases include recovery as activity begins to rise from a trough, boom as rapid growth occurs, peak when activity levels off, recession as activity declines, depression as the decline worsens, and trough when activity hits bottom. Factors shaping the business cycle include volatility of investment, momentum from previous cycles, and technological innovations.
Mod 4 of eco ru extra
The document discusses business cycles, providing definitions and explanations of key concepts:
- Business cycles refer to periodic fluctuations in economic activity, alternating between periods of expansion/prosperity and contraction/recession.
- The phases of a business cycle are expansion, peak, contraction/recession, and trough. Cycles vary in duration from 2-10 years.
- Features of business cycles include their periodicity, synchronic impacts across industries, and effects on variables like employment, investment, and prices. Investment and durable goods are most impacted.
Mod 4 of eco ru extra
The document discusses business cycles, providing definitions and explanations of key concepts:
- Business cycles refer to periodic fluctuations in economic activity, alternating between periods of expansion/prosperity and contraction/recession.
- The phases of a business cycle are expansion, peak, contraction/recession, and trough. Cycles vary in duration from 2-10 years.
- Features of business cycles include their periodicity, synchronic impacts across industries, and effects on variables like employment, investment, and prices. Investment and durable goods are most impacted.
Trade (Business) Cycle
Trade (Business) Cycle content slideshow. Designed for the Economic A level qualification. Can be used in revision and in class.
Subtopics
Intro to the Trade Cycle
Phases of the Trade Cycle (Booms, Recessions, Slumps, Recoveries)
macroeconomic problems
The document discusses several macroeconomic problems including capital and labor misallocation, inflation, and business cycles. It defines inflation and its types. Moderate inflation can boost growth but high inflation is harmful. Measures to control inflation include monetary, fiscal and income policies. Business cycles consist of expansion, peak, recession, trough and recovery phases, though their timing and severity vary. No single measure can adequately curb inflation and both monetary and fiscal approaches are needed.
1. Describe all four phases of a business cycle. 2. Identify and des.pdf
1. Describe all four phases of a business cycle. 2. Identify and describe three most severe
recessions of the 20th century in the United States. 3. What will happen to unemployment and
inflation during a recession? Explain
Solution
Q1. The alternating periods of expansion and contraction in economic activity is referred to as
business cycles.
The duration of business cycle is not of same length. It varies from a minimum of two years to a
maximum of ten to twelve years. However, business cycles are repetitive and regular.
In some business cycles there are large swings away from the normal but in some swing is of
only moderate nature. It is the business cycles with large swings that create damage to the
economy.
Business Cycles are generally consists of four phases –
1. Expansion – It is also known as period of boom or prosperity
2. Peak – It is the upper turning point of the business cycle.
3. Contraction – It is also known as period of recession or downswing.
4. Trough – It is the lower turning point of the business cycle.
Expansion – In this phase, economy experiences an increase in both output and employment. Net
investment in positive manner occurs in the economy with demand for durable goods gather
momentum. Price level also rise during this phase generally on back of higher aggregate demand
as people are experiencing an increase in standard of living on back of high level of economic
activity.
Peak – This is the top point of the business cycle and where expansion phase comes to an end. At
this point, economy is producing its highest possible output given the resources. In other words,
economy is at its full employment level. Gap between potential real GDP and actual real GDP
becomes zero in this phase. Only natural rate of unemployment exists in this phase.
Contraction – This is the phase when economy starts experiencing a fall in output and
employment. There are many causes to this trend like reduction in credit availability, rise in price
of important natural resource or adverse impact on profit expectations or households and
businesses becoming pessimistic about economy. This phase is characterized by the rise in
unemployment. Net investment becomes negative and demand for durable goods declines rapidly
leading to creation of excess capacity in industries. Purchasing power of people falls on back of
lower economic activity.
Trough – This is the lowest point of business cycle. At this point production in economy is at its
lowest and unemployment is at its highest. Resources are left unutilized. Economy is producing
at under-employment level. Gap between potential real GDP and actual real GDP becomes
highest in this phase..
Economic fluctuations
1) There are four phases of the business cycle: recession, depression, peak, and trough. Recessions are periods of economic contraction while expansions include booms.
2) Business cycles cause fluctuations in real GDP and cyclical unemployment. The size of recessions and expansions can be measured by comparing actual output and unemployment to potential output and the natural rate of unemployment.
3) Short-term economic fluctuations are primarily caused by changes in aggregate spending as prices adjust and markets reach equilibrium. Policymakers aim to stabilize the economy by closing output gaps between actual and potential output.
Sabelo madise
This document contains a collection of presentations on business cycles. It defines a business cycle as having four phases: contraction, trough, expansion, and peak. These phases involve periodic rises and falls in economic activity measured by variables like GDP. Specific indicators are categorized as leading, coincident, or lagging. Causes of business cycles include aggregate demand, aggregate supply, and external factors like inventions, wars, and political events. Government uses fiscal and monetary policy tools to address recession and growth phases of the business cycle.
Phases of business cycle
The document discusses business cycles, also known as trade cycles. It defines them as alternating periods of economic expansion and contraction. Expansion periods are times of high income, output, and employment, also called prosperity. Contraction periods are times of low income, output, and employment, also called recessions. The business cycle involves four phases - prosperity, recession, depression, and recovery - as the economy fluctuates between expansion and contraction over time.
CA NOTES ON BUSINESS CYCLES IN BUSINESS ECONOMICS
CA NOTES ON BUSINESS CYCLES IN BUSINESS ECONOMICS
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Business Cycle presentation
This presentation is based on the business cycle as a whole and its effects in the employment, production, inflation as well as government interference.
Business Cycles in Economics from HelpWithAssignment.com
The document discusses business cycles, which refer to the recurring and predictable pattern of economic expansions and contractions that industrialized countries experience. Business cycles involve periods of economic growth, or expansions, followed by periods of decline, or recessions and contractions, and then recovery again back to expansion. While business cycles are recurrent, moving between periods of growth and decline, they are not periodic and can vary significantly in duration. Key aspects of business cycles include comovement across economic sectors and persistence, where declines in activity tend to lead to further declines and growth tends to continue.
Business cycle (Abhishek and Aditya)
The presentation is related about the business cycle, types and phases of business cycle and conclusion.
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Business cycles
- 1. Prepared by :- Mehul Rasadiya
- 2. Business Cycles √ The term business cycle refers to the recurrent ups and downs in the level of economic activity, which extend over several years. √ Individual business cycles may vary greatly in duration and intensity. √ All display a set of phases.
- 3. THE BUSINESS CYCLE Phases of the Business Cycle PEAK RECESSION TROUGH RECOVERY Level of business activity Time
- 4. Level of business activity PEAK Time √ Peak or prosperity phase: Real output in the economy is at a high level Unemployment is low Domestic output may be at its capacity Inflation may be high.
- 5. Level of business activity RECESSION Time √ Contraction or recession phase: Real output is decreasing Unemployment rate is rising. As contraction continues, inflation pressure fades. If the recession is prolonged, price may decline (deflation) The government determinant for a recession is two
- 6. Level of business activity TROUGH Time √ Trough or depression phase: Lowest point of real GDP Output and unemployment “bottom out” This phase may be short-lived or prolonged There is no precise decline in output at which a serious recession becomes a
- 7. Level of business activity RECOVERY Time √ Expansionary or recovery: Real output in the economy is increasing Unemployment rate is declining The upswing part of the cycle.
- 8. Business Cycle-one cycle through 4 phases Real GDP Peak per year Peak Trough One cycle Time
- 9. Recessions since 1950 show that duration and depth are varied: Period Duration in months Depth (decline in real GDP) 1953-54 10 — 3.0% 1957-58 8 — 3.5% 1960-61 10 — 1.0% 1969-70 11 — 1.1% 1973-75 16 — 4.3% 1980 6 — 3.4% 1981-82 16 — 2.6% 1990-91 8 — 2.6% 2001 8 app. —3.3%
- 10. How Indicators Monitor the Four Phases of the Business Cycle • The Leading Indicator System … provides a basis for monitoring the tendency to move from one phase to the next. …assesses the strengths and weaknesses in the economy … gives clues to a quickening or slowing of future rates of economic growth … indicates the cyclical turning points in moving from the upward expansion to the downward recession, and from the recession to the upward recovery.
- 11. Leading indicators anticipate the direction in which the economy is headed. The coincident indicators provide information about the current status of the economy 1) changing as the economy moves from one phase of the business cycle to the next 2) telling economists that an upturn or downturn in the economy has arrived. Lagging indicators change months after a downturn or upturn in the economy has begun
- 12. Based on the theory that expectations of future profits are the motivating force in the economy. Companies may expand production of goods and services and investment in new structures and equipment,when business executives believe that their sales and profits will rise. When they believe profits will decline, they reduce production and investment. These actions generate the four phases of the business cycle.
- 13. Causes of Fluctuations Innovation Political events Random events Wars Level of consumer spending Seasonal fluctuations Cyclical Impacts — durable and non durable
- 14. An Actual Business Cycle 1981 - 1990 ($ billion, 1992 dollars) Real GDP 6000 Peak 5200 Peak 4600 Trough ‘80 82 ‘85 ‘90 One Cycle
- 16. The Great Depression [continued]
- 18. Global Depression, 1929-1932 Ave. Unemployment Rate, 1925-1928 Ave. Unemployment Rate, 1929-1933 Percent Decrease in Prices, 1929-1932
- 19. Six Million “Rosie the Riveters” World War II Production of these items brought us ou of the Great Depression. 300,000 warplanes 124,000 ships 289,000 combat vehicles and tanks 36 billion yards of cotton goods 41 billion rounds of ammunition 2.4 million military trucks 111,527 tank guns and howitzers •$288 billion was spent on the war, •$100 billion in the first six months. Unemployment hit an all-time low of 1.2% and personal savings were 25.5%.