The Business Cycle
The Business Cycle:
Recession:
Characteristics:
The economy slows down, and the level of sales and production orders start declining.
Production facilities become underutilized, and companies respond by reducing the work rate.
Workers who had been hired basis are laid off, and/or this reduces their disposable income.
Celebrity Example: Stephen Baldwin
Filed for bankruptcy.
Personal debt of $2.3 million.
Owed more than $1 million in taxes.
Victim of the housing market collapse.
Trough:
Characteristics:
Demand for products and services decrease, forcing companies to shut down some production facilities.
Unemployment leaves the consumers with very little disposable income needed to buy necessities.
The gross domestic production declines and standard of living of the people also declines.
Celebrity Example: Soichiro Honda
Began with a series of failures
Jobless for a long period of time
He started making scooters of his own at home, finally started his own business.
Expansion:
Characteristics:
There is an increase in productivity due to the increased aggregate demand in the economy.
Increase in production allows companies to start hiring which leads to an increase of income.
Profit margins of companies starts rising, and the gross domestic product also start to increase.
Celebrity Example: David Blaine
Performing more in-human stunts which is earning him great load of income
People around the world are investing in his magic performances
He is partnered and is collaborating many other celebrities to advertise himself for success
Peak:
Characteristics:
An economic expansion increases the demand for both capital and consumer goods.
Companies invest in more production facilities and inventories in anticipation of taking advantage of increases in sales and profit.
Strong demand pushes the need for more workers to work on these industries, which spurs an increase in employment levels.
Celebrity Example: Beyonce
Earned $87 million worth assets
Recession:
Characteristics:
The economy slows down, and the level of sales and production orders start declining.
Production facilities become underutilized, and companies respond by reducing the work rate.
Workers who had been hired basis are laid off, and/or this reduces their disposable income.
Celebrity Example: Stephen Baldwin
Filed for bankruptcy.
Personal debt of $2.3 million.
Owed more than $1 million in taxes.
Victim of the housing market collapse.
Trough:
Characteristics:
Demand for products and services decrease, forcing companies to shut down some production facilities.
Unemployment leaves the consumers with very little disposable income needed to buy necessities.
The gross domestic production declines and standard of living of the people also declines.
Celebrity Example: Soichiro Honda
Began with a series of failures
Jobless for a long period of time
He started making scooters of his own at home, finally started his own business.
Expansion:
Characteristics:
There is an increase in productivity due to the increased aggregate demand in the economy.
Increase in production allows companies to start hiring which leads to an increase of income.
Profit margins of companies starts rising, and the gross domestic product also start to increase.
Celebrity Example: David Blaine
Performing more in-human stunts which is earning him great load of income
People around the world are investing in his magic performances
He is partnered and is collaborating many other celebrities to advertise himself for success
Peak:
Characteristics:
An economic expansion increases the demand for both capital and consumer goods.
Companies invest in more production facilities and inventories in anticipation of taking advantage of increases in sales and profit.
Strong demand pushes the need for more workers to work on these industries, which spurs an increase in employment levels.
Celebrity Example: Beyonce
Earned $87 million worth assets