The Business Cycle Introduction to Business & Marketing Distribute: note guide!! Introduction to Business & Marketing

Task 44 Define the phases of the business cycle.

The Business Cycle Rise & fall of economic activity over time Economies naturally go through “ups” and “downs” U.S. economic slumps in 1930s, 50s, 70s and 00s Caused a fall in economic activity & rise in unemployment The economy may be influenced by war, foreign competition, changes in technology, changes in consumer wants, etc.

The Business Cycle Economic downturns/slumps are followed by new waves of increased productivity & increased GDP The economy has been influenced by: War Foreign competition Changes in technology Changes in consumer wants The economy may be influenced by war, foreign competition, changes in technology, changes in consumer wants, etc.

The Business Cycle Prosperity Recovery Recession Depression The economy may be influenced by war, foreign competition, changes in technology, changes in consumer wants, etc.

Prosperity Peak of the economy when demand is high High level of production (GDP) and income / profits Low level of unemployment Consumers are spending

Recession Decline in the economy during which demand starts to fall Steady decline in production (GDP) and income / profits Increasing unemployment rate Consumers start to save their money

Depression Contraction of the economy when demand is low Lowest levels of production (GDP) and income / profit High level of unemployment Consumers are saving their money

Recovery Expansion of the economy when demand starts to rise Steady increase in production (GDP) and income / profit Decreasing unemployment rate Consumers are starting to spend their money again

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