Business cycle

Business cycle

  • Submitted By: iodx
  • Date Submitted: 12/17/2014 2:20 AM
  • Category: Business
  • Words: 1521
  • Page: 7

 Business Cycle

In this essay I will be defining the stages of a business cycle and explaining how these stages affect us. I will also be stating the methods we have used to ensure success during these stages.
A business cycle is a diagram alongside statistics which shows the fluctuations of gross domestic product.

Gdp is the market value of recognized goods and services in money terms produced with a period of time. An increase in GDP is called an economic growth while a decrease is called a negative growth. The GDP is the way a government can view the health of the UK economy.
UK economy : The UK economy is slowly becomign better although thsi is after one of the longest periods of econmic stagnation on record after the recession; which occured in 2008. GDP has been flat for the past two years and the real GDP is still very low compared to that of 2008.

The government controls GDP by lowering taxes for businesses (corporation tax) and consumers (disposable income) toavoid a recession or slump and to improve the overall economy as most businesses such as luxury services struggle during a recession or slump. The government can also spend more moeny on itself e.g building projects e.g schools and hospitals as well as consulting with the Bank Of England to raise or lower interest rates.

The Bank of England predict fair growth for 2013, with the potential for a fall in output before the economy potentially recovers towards the end of the year.

The first stage of a business cycle is a boom which is when an economy peaks in economic activity, this contains economic activity which is related to demand for goods (production, employment, sales,interest rates and investment). This affects our customers because it means that they have more money to spend during this time and are less cautious about what and how much they are spending. During seasons where booms occur we focus less on our value brand and try and publicise our...

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