Economics for Business
Essay Question
Lecture Name - Maruf Mostafa
Student Name - Wastu Kankanamalage Gayani Chathurangi Maithripala
Student ID – 11621711
Word Count – 1000
Introduction
This essay will mainly focus, discussing business cycles in macro-economic conditions and their impact towards the country. The first part of the essay will describe different economic conditions within the macro-economic such as an economy boom and recession. The argument will bring out some definitions to provide more depth to the discussion. The latter part of the essay will illustrate the aggregate demand and aggregate supply model to demonstrate the relationship between gross domestic product (GDP) and the price level by using different
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The positive swings or the high growth in the economic activities is called contractions and the down swings and declining growth in the economic activities is called a recession.
According to the National Bureau of Economic Research, Recession is a critical decline in economic activity over the period of time and it will be evident through economic performance activities such as GDP, income, employment, industrial production, and wholesale-retail sales. (National Bureau of Economic Research)
Aggregate demand and Aggregate supply Model
The aggregate demand and aggregate supply models are related to describe macroeconomics and referred to as the AS/AD model. This model is a useful tool to evaluate the gross domestic product (GDP) against the price level and the AS/AD model is used in this discussion to explain business cycles including, recession, stable economy and contractions (Hess, P. N. 2013)
The supply curve (AS) curve refers to the quantity of output supplied by the business sector to the price of output while the demand curve (AD curve) refers to the quantity of output demanded by the various sectors of the economy. (DeLong, J. B. 2003) The quantity of real GDP is calculated based on three key inputs such as labour (L), capital (K) and technology (T) within the economy (Hubbard 2012)
There are two
Recession have a huge impact in the industry because it reduces consumer’s purchasing power which leads to reduce expenditure in different goods and services
go through cycles of expansion, recession and recovery. Monetary and fiscal policies can affect the timing and length of these cycles. In the expansion phase, the economy grows, businesses add jobs and consumer spending increases. At some point, known as
A recession is a conciliation of health insurance policies based on a misstatement of fact on the insures application for coverage.
According to the financial definition, a recession is a significant decline in activity spread across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income, and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's GDP. (Dictionary.com) A less official and more realistic definition of an economic recession is the social perception of the state of the economy at a given time. The collective beliefs of the public, mainly businesses and consumers, drive the social perception of whether things are seen as positive or negative. Unfortunately
The two economic environments that I would be describing about are recession and growth on the business activities of John Lewis. Growth occurs when more goods are being produced and consumed, and also incomes are rising. During growth people spend more money on goods and services as they have more money to spend and also businesses would invest more and hire more labour as it links to increasing demand. Recession however occurs when people involved in business become more cautious so they cut their spending down and also cut back on their orders as well as making workers unemployed or redundant.
In this paper, I will explain the roles and importance of the Business cycle Dating committee of the National Bureau of Economic Research. I will also explain how the NBER defines and dates recessions. Finally I will explain the important aspects and effects of the last recession.
A recession is full-proof sign of declined activity within the economic environment. Many economists generally define the attributes of a recession are two consecutive quarters with declining GDP. Many factors contribute to an economy's fall into a recession, but the major cause argued is inflation. As individuals or even businesses try to cut costs and spending this causes GDP to decline, unemployment rate can rise due to less spending which can be one of the combined factors when an economy falls into a recession. Inflation is the general rise in prices of goods and services over a period of time. Inflation can happen for reasons such as higher energy and production costs and that includes governmental debt.
Recession is a significant decline in real GDP, real income, employment, industrial production, and wholesale/retail sales, which last more than a few months. (Economic recession, n.d.) Further, a recession typically begins after a peak in the economy and ends at the trough, however, “the start and end dates are determined by the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER).” (Economic recession, n.d.)
According to Investopedia.com, “A recession is a significant decline in activity across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP); although the National Bureau of Economic Research (NBER) does not necessarily need to see this occur to call a recession.” Fiscal policy is the use of government spending and taxation to try to influence the economy. This is done many times in an attempt to prevent a recession or at a minimum, to try to stabilize the economy. Monetary policy is the central bank, currency
Aggregate demand measures the demand for an economy's gross domestic product (GDP). This value is calculated by the equation: AD = C + I + G + NX, where AD refers to aggregate demand, C refers to total consumer spending, I refer to total investment, G refers to government expenditure
There are times when a nation undergoes economic hardship for a long or short period of time. The recession is the term used by economists to define this period, it is a time when the nation?s economic GDP is low for more than two quarters consecutively (Beckworth, 2012). Recession often results in plunges in the stock market, unemployment, housing market, and a decrease in the quality of life of the citizens. The United States experienced a recession from December 2007 to June 2009 (Braude, 2013). It was the country?s greatest economic downfall for last 60 years earning the name ?The Great Recession?. During this period there
The Great Recession was financial down turn that happened from 2007-2009, largely because of the housing market decline. The term recession refers to any significant decline in an economy that lasts longer that a few months. Its beginning can be signified by two consecutive negative quarters of economic growth. The great Recession caused many areas of the economy to struggle, one of the biggest was the unemployment rate. In December of 2007 the unemployment rate was 5%. From that point this number grew until it had reached 10% in October of 2010. Due to the unemployment rates steady rise, the national output decreased.
The business cycle is a predictable long-term pattern of alternating periods of economic growth and decline (recession). This periodic up-and-down movement in
The United States has one of the largest economies in word. It contains an abundance of resources, making it easily available for us to create goods and services. The U.S. has had a long recovery after the great recession in 2008, but has come back from that and is now flourishing. Minimum wage has increased, oil prices are down, and the unemployment rate is at 4.8%. There have been immense advancements in technology and other business ideas which has made millions of jobs. The four business cycles that an economy can go through are: recovery, boom, recession, and depression. A recovery consists of increasing employment, upward pressure on prices, and economic growth. A boom is similar to a recovery but it is composed of rapid economic expansion
Recession is defined as the economic slowdown or decline characterized by slowing down of trade, a magnitude decline in the GDP, and a decrease in employment usually lasting between 6months to a year. This was the situation in the USA the hardest times being from 2008 through 2009 and the early months of 2010. America is still recovering from the effects of the recession that the country experienced from 2007 to 2009.