Business Cycles Essay

756 words - 4 pages

Business Cycles

Business cycles are the "ups and downs" in economic activity, defined in terms of periods of expansion or recession. “Business cycles occur because disturbances to the economy of one sort or another push the economy above or below full employment. Inflationary booms can be generated by surges in private or public spending (Roomer, Christina D).” The phases of the business cycle are Prosperity Phase: Expansion or Boom, where an increase in production and prices occurs, and lower the interest rates. Recession Phase: from prosperity to recession, where produces a fall in prices and activity with an increase in unemployment and interest rates. Depression Phase: Contraction of economic, which usually begins by capital markets running into bank and corporate failures. Recovery Phase: from depression to prosperity (lower turning Point), which begins when the shares recover from falls in prices and income.
The Prosperity phase of a Business cycle is the highest point in the economic. It is also called the peak. At this point in the economy’s full employment, i.e., all persons in employment and production is at its highest level. Since no labor or production capacity remaining, there is no further economic growth. “The features of prosperity are high level of output and trade, high level of effective demand, high level of income and employment, rising interest rates, Inflation, Large expansion of bank credit, business optimism and high level of MEC (Marginal efficiency of capital) and investment (Brian Bass).” The level of production is maximum and there is a rise in GNP (Gross National Product). On the other hand, Recession phase is where economic activity becomes slower. At this stage production, investment, trade and employment, and the income of individuals, companies and the government are reduced, therefore, economic growth is negative. This recession can present severe and prolonged, leading the economy to a state of crisis. In effect business expansion stops, and the stock market falls.
The Business Cycle phase of Depression or crisis is the lowest point in the economic cycle. At this point it low levels of employment (unemployment) are presented, consumers do not have many resources to consume and therefore, there is no demand for goods and services in the economy. In depression, “there is underutilization of resources and fall in GNP (Gross National...

Find Another Essay On Business Cycles

Managing Life Cycles Influences in an Organization

1222 words - 5 pages Managing Life Cycles Influences in an OrganizationFor everything in life there is a season, and the same holds true for business. There is a life cycle that successful businesses inevitably pass through. They endure the perils up start-up, often on a shoestring; they grow to greater size and stability, permitting the owners to think about building wealth for themselves and their employees; and they progress to a point where owners have to think

Impact of Political Cycles on Stock Returns

822 words - 4 pages Numerous academic studies over the past four decades has examined the impact of political cycles on stock returns in order to achieve predictable patterns found investors can both follow and, if you can exploit. Their findings have come to agree that the patterns observed in the various countries around the world such as Australia, New Zealand and the United States were varies between their political systems. Review of Nordhaus (1975) for Booth

Biogeochemical Cycles

2245 words - 9 pages Life on earth maintains its balance by the existence of four biogeochemical cycles, namely, the water cycle, the carbon cycle, the nitrogen cycle and the phosphorus cycle. These cycles are formed on the basis of various organic and inorganic nutrients which circulate through the cycle in different forms along these cycles. These cycles are essential because they prevent the nutrients from being depleted entirely and without these chemicals "life

Steel-Mill Cycles

1432 words - 6 pages Steel-Mill Cycles During the mid-1880's, large groups of immigrants poured into the United States.Some came in search of a new life, and some merely wanted to make enough money to go back to their home country. However, there's no doubt that these individuals all had hopes and dreams of what the "New World" would bring. Their hopes and dreams laid in the idea of unlimited employment opportunities. Leaving behind endless poverty and oppression

Ipod Product Life Cycles

840 words - 3 pages each upgrade, Apple seems to be making the iPod trendier and even more appealing to the huge masses of mainly young crowds who now tend to view the product as the epitome of what the adjective fashionable means. Customers see Apple as the hip, young, rebellious company because of its smaller size and offbeat corporate culture.ReferencesApple (2008). Marketing. Retrieved November 22, Year, from, T. (2008). The Outlook for Apple's iPod Business. Seeking Alpha. Retrieved November 22, 2008, from

The Cycles of International Conflict

1298 words - 5 pages war and until these cycles are broken international unrest will continue to persist. Works Cited Clark, David. "Libyan Intervention Was a Success, despite the Aftermath's Atrocities." The Guardian. Guardian News and Media, 28 Oct. 2011. Web. 5 Apr. 2012. . Goldstein, Joshua S., and Jon C. Pevehouse. Principles of International Relations. New York

This essay describes the economic political cycles in the United States over the last 50 years in reference to Democratic and Republican parties

4646 words - 19 pages happens due to an increase in the standard of living. Therefore the government's expenditures will increase and personal taxes will also increase to cover the governments costs.The only time that the partisan model does not hold true is during economic booms and recessions. If the U.S. economy were a steady economy, which did not have business cycles, recessions or booms then I believe that the partisan model would hold true in every presidency

Earth’s Cycles and Global Climate Change

1494 words - 6 pages The planet Earth goes through cycles in every aspect of its environment from temperature, to water levels, to levels of carbon dioxide in the atmosphere. There has always been a limit to the levels of carbon dioxide in the atmosphere. The Earth is like a human body. If a human does not take care of their body through healthy eating and workouts, they become unhealthy and may have health problems. As with Earth, if Earth takes in more heat

Global Warming: Human Activity vs. Natural Cycles

1225 words - 5 pages controversial topic, though most of the scientific community can recognize the existence of global warming. Many often question if this effect on the environment is caused by human activity or natural cycles. About 95 percent of scientific studies prove that global warming is essentially caused by man. Although among scientists there is a consensus, all people do not believe it to be true that society contributes to global warming by enforcing the use of

The Bluetongue Virus and Trypanosoma Cruzi Virus Transmission Cycles

1679 words - 7 pages (Mullens et al, 1986). There are other minor routes of transmission which include transplacental and venereal transmission in cattle and only transplacental in sheep (Mullens et al, 1986). The ability of female midges to survive during the winter and successfully complete ovarian cycles is an essential component of the virus’ transmission, given the fact that they need to survive for at 10 to 14 days after the first blood meal off of an infected

TQM Initiatives in Optimising Software Development Life Cycles

3566 words - 14 pages Executive SummaryACME Systems is a leading global technology company, operating in over 30 countries on 6 continents. The Group provides solutions and services that optimise and manage the performance of IT infrastructures to enable businesses to build a competitive advantage (ACME Systems Australia).The Application Integration (AI) line of business is a major part of the ACME Systems strategy for IT solutions. The primary focus of the AI team

Similar Essays

Business Cycles Essay

2885 words - 12 pages example. Some of these theories are:*Sunspot Theory/Climatic Theory*Political Theory*War TheoryINTERNAL/ENDOGENOUS THEORIESThese theories look for mechanisms within the economic system itself that give rise to self-generating business cycles. This approach relies on the theory that a business cycle is accumulative in nature and that it feeds on itself. Every expansion breeds recession and contraction and vice versa. Some of the important internal

Business Cycles And The Factors In Our Market That Affect These Cycles

5598 words - 22 pages Business Cycles are WHACKAccording to Todd N Lebor, "Business cycles are about as easy to nail down as a grasshopper on amphetamines." Business cycles, in other words, can be referred to as the mood swings of an economy. A business cycle defines the various contractions and expansions that occur in the economy. Macroeconomics, or the study of the economy as a whole, deals with certain things such as aggregate (total) supply and demand and GDP

Life Cycles Of Brands Essay

542 words - 2 pages have examples of other brands such as Polaroid, Levi Strauss to name a few, which have not lasted forever (p. 253). Similar to the product life cycle, all brands also go through their individual life cycles. The Business and Management Dictionary defines the brand life cycle into three stages. The introductory period is during which the company develops a brand and introduces it to the market. The brand faces competition from other products of a

Life Cycles Of Products Essay

1612 words - 6 pages Life Cycles of Products The definition of a product is "anything that is capable of satisfying customer needs", this includes both physical products, like cars, cell phones, machines, as well as services like banking, and insurance. Businesses manage and modify their products over time so that they constantly meet the changing demands of