Unit 1 P5 M2
Business cycle
Boom: - during the boom stage of the business cycle the economy is performing its best. Demand, production and sales figures are high. To meet the high levels of demand and production the business has to create new jobs; by doing this the percentage of the nation has money to spend on goods and services. However as businesses produce greater profits higher wages can be paid to employees growing their disposable income. People& businesses in the economy are allowed to spend money as there is a great business available for them.
Recession: - customers continue to spend but overall load fall and product services become more costly. As a result to this businesses are strained to reduce the prices of their items to generate sales. The reduced output also causes people to lose their jobs, and in some cases this can cause economic failure as the business cannot continue to exist in the reduced economy.
Slump: - throughout slump, confidence in the economy is at its lowest. The production is low and the demand for work continues to fall. Even those that are working may be forced to take a salary drops due to the cut costs in the corporation. Businesses continue to fail as profits and investments are low due to a lack of disposable income, towards the end of the slump period yet, confidence slowly starts to arrival.
Recovery: - when a business enters the recovery stage the business begins to spend and throwaway income slowly begins to rise, fresh businesses go into the market as the economy starts to produce.
GDP (Gross Domestic Product)
The gross domestic product (GDP) is one the primary indicators used to gauge the health of a country's economy. It represents the total dollar value of all goods and services produced over a specific time period - you can think of it as the size of the economy. Usually, GDP is expressed as a comparison to the previous quarter or year. For example, if the year-to-year GDP is up 3%, this is thought to mean that the
Boom: - during the boom stage of the business cycle the economy is performing its best. Demand, production and sales figures are high. To meet the high levels of demand and production the business has to create new jobs; by doing this the percentage of the nation has money to spend on goods and services. However as businesses produce greater profits higher wages can be paid to employees growing their disposable income. People& businesses in the economy are allowed to spend money as there is a great business available for them.
Recession: - customers continue to spend but overall load fall and product services become more costly. As a result to this businesses are strained to reduce the prices of their items to generate sales. The reduced output also causes people to lose their jobs, and in some cases this can cause economic failure as the business cannot continue to exist in the reduced economy.
Slump: - throughout slump, confidence in the economy is at its lowest. The production is low and the demand for work continues to fall. Even those that are working may be forced to take a salary drops due to the cut costs in the corporation. Businesses continue to fail as profits and investments are low due to a lack of disposable income, towards the end of the slump period yet, confidence slowly starts to arrival.
Recovery: - when a business enters the recovery stage the business begins to spend and throwaway income slowly begins to rise, fresh businesses go into the market as the economy starts to produce.
GDP (Gross Domestic Product)
The gross domestic product (GDP) is one the primary indicators used to gauge the health of a country's economy. It represents the total dollar value of all goods and services produced over a specific time period - you can think of it as the size of the economy. Usually, GDP is expressed as a comparison to the previous quarter or year. For example, if the year-to-year GDP is up 3%, this is thought to mean that the