Business Cycle Essay

What Is The Business Cycle? Essay
1.1 What is the 'Business Cycle '
The business cycle is the oscillation in financial action that an economy encounters over a timeframe.
A business cycle is essentially characterized in terms of periods of development or subsidence. Amid
expansions, the economy is developing in genuine terms, as prove by increments in indicators like
business, industrial production, sales and individual earnings. Amid recessions, the economy is
contracting, as measured by abatements in the above indicators. Development is measured from the
trough (or base) of the past business cycle to the pinnacle of the present cycle, while recession is
measured from the top to the trough. (n.g., What is the 'Business Cycle ', n.g.)
1.2 Iceland GDP growth
The GDP in Iceland progressed 3.7% per year in the second quarter of 2016, abating from an
upwardly modified 4.4% development in the past quarter. Net exchange contributed contrarily as
fares hindered while imports expanded more on the positive side, quicker development was
accounted for: private utilization, government spending and gross altered capital formation. On a
quarterly premise, the economy extended 2.1%, taking after a 0.8 % expansion. Gross domestic
product (GDP) Annual Growth Rate in Iceland found the middle value of 3.15% from 1998 until
2016, achieving a record–breaking high of 13.40 % in the main quarter of 1999 and a record low of
– 9.30% at the final quarter of 2009 (n.g., Iceland GDP Annual Growth Rate, 2016). Iceland 's
economy
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The Growth And Peak Stage Of A Business Cycle
Business cycles contain several stages which span GDP and time itself. These stages are growth,
peak, recession and a trough or depression. These cycles repeat themselves over and over through
out time in the business world. The growth and peak stage of a business cycle are when
companies are building and providing great products and services. This is also the period when
jobs are most abundant and harder to fill because job positions are in demand. After the peak
stage a risky point in time follows which is the recession stage. During this time people tend to
loose their jobs and it is a much harder time to find a job as well. The depression stage is
depressing to both companies and people because many consumers lose their jobs and can...show
more content...
We entered a depression period and this period lasted longer then some of the other periods in our
history. Many economists wonder why a recovery, which leads out of the depression and into the
growth stage, took longer then normal to begin. When looking back at history, I may have found
the answer. Big spending is required to make companies produce more and the biggest factor of
spending money is war. This paper will examine a close relation in our history of recession, war,
and recovery. Since 1950, there have been many recessions in the US, which greatly affected all
Americans. At the same time there have been innovations, technology, banking changes and political
activities which have been thought to have caused the recessions, and ultimately fixed the
recessions. We will explore a potential relationship between recovery and war as to the potential for
speeding up a recovery. Not too long ago, during the Great Recession of 2007–2009, employment
had peaked in the first part of 2008 and then it declined. According to McConnell (2015), "In the
first part of 2010 job growth was very slow to recover and economists have been vigorously debating
why employment recovered so slowly after the Great Recession of 2007–2009. The Great Recession
began December 2007 and ended in June 2009" (p.18). Banks had loaned excessive amounts of
money to consumers

Economic Growth– GDP
Economic Growth...
...An increase in an economy's ability to produce goods and services
Gross Domestic Product– represents the value of a country's national income in one year.
An increase in real GDP means that the standard of living within a country is increasing. It is
therefore used as a way of measuring a country's economic growth.
The Business Cycle– there are discernable patterns in these levels over time, there will be periods of
time when economic activity is rising and other times when the level of economic activity slows
down.
The Business Cycle
The Four Stages of the Business Cycle are:
Boom: A period of very fast economic growth, with rising incomes and profits.Inflation will rise and
there will be...show more content...
This is because investors will look to buy UK assets since they now command a higher return. As
the demand for sterling rises it pushed up the exchange rate.
When the exchange rate alters it affects the degree to which firms are competitive in foreign
markets, and also affects the cost of imports of raw materials, components and semi–finished
products as well as foodstuffs. If the pound rises in value compared to the euro or the dollar, for
example, it means that exporters will find that they are less competitive since foreign buyers now
have to give up more euro or dollars to buy the same amount of pounds. To those foreign buyers it
seems like the goods and services have risen in price and this can affect demand for the UK exports.
At the same time, UK buyers of foreign goods will get more dollars or euro for their pound and it
will feel to them like imports prices have fallen. The reverse applies if the exchange rate falls in
value and the pound is worth less against other currencies.
Strong
Pound
Imports
Cheaper
Exports
Dearer
Weak
Pound
Imports
Dearer
Exports
Cheaper
Inflation...
...A rise in the general price level over a period of time.

Inflation is seen as being a central economic factor. Changes in the rate of inflation have significant
effects on businesses and individuals. Inflation is important for the following

Ipo : A Business Cycle Essay
Introduction
A company goes to a different business cycles. After surviving the startup period and start making
positive profits, a company may choose of make an IPO. The term initial public offering (IPO) is
used by company to raise capital by selling stock in primary market. Investopedia defines an initial
public offering (IPO) as the first time a company sells its stock to the public. This is a way to raise
money by issuing debt and it is only called IPO if the company have never issued equity to the
public before. IPO is usually referred "going public" because company by selling portion of the
company to the public become a public company. Once the stock of a company is sold to the public,
the shareholders become the owner of the company since they bought the company's stock. Per
Investopedia, companies decide to go public for these following reason:
To raise capital
Public companies have increased scrutiny which may provide them better rates if they decide to
issue debt as well
A publicly traded company may issue more money if there is market demand, and this may make
mergers and acquisitions process easier
Trading in the stock exchange provides the company more liquidity which can allow them to provide
employee benefits such as stock ownership plans, thus attracting more talents.
Keywords: IPO
The Process of Getting an IPO (Investment Banking)
There are a lot of components of IPO. There are a lot of considerations and requirements that should
be met before a

Business Cycle Case Study
1. In your own words, explain what the "Business Cycle" is. Business cycle is Gross Domestic
Product (GDP) measure. The cycle is an increase and decrease of monetary value throughout the
entire cycle.
a. Why it is important for a company to try and forecast the Business Cycle? It is important for a
company to try and forecast the Business Cycle to indicate practices beneficial and not beneficial to
the organization with the goal of an upward trend line and minimal increase and decrease to GDP
for steady growth in the Business Cycle.
b. In general, are short–term forecasts more or less accurate than long–term forecasts? Explain.
Short–Term forecasts overall is less accurate than long–term forecasts. Data collected over a
sufficient period create a clearer analysis of three of four...show more content...
Market experiments are based on smaller scales.
2.Market experiments are based on short–term controlled conditions.
3.Market experiments price changes can result in loss of customers ( D.N. Dwivedi).
c. If you were to design a statistical sample in order to estimate a demand curve, would you conduct
a random sample of the general population, a targeted sample, or a randomized–targeted sample?
Explain. If I were to design a statistical sample, I would design a random sample in order to
estimate a demand curve. A random sample is choosing any of the population for survey, which
might tell me what a random person expects to see in a product. Other scenarios might dictate the
better approach, an example is if you wanted to find out what would be the most popular beard dye
than you might consider using a target sample to target the male population.
d. Assume your staff presents you with 2 different regressions of a demand curve for your most
important product. One of the regressions has an R–squared of 0.86 and the other has an R–squared
of 0.61. Assume that both regressions have a t–value for the coefficient of 1.8. Which would you
choose to work with and

The Four Stages Of The Business Cycle
The four stages of the business cycle are complex phases that our economy undergoes. To grasp the
concept of the stages, you must first be familiarized with the business cycle itself. The business
cycle is the alternating periods of growth and decline. Or to be more intricate, "The business cycle is
the periodic but irregular up–and–down movement in economic activity, measured by fluctuations in
real gross domestic product (GDP) and other macroeconomic variables," (Inc.com). Abusiness cycle
is comprised of four stages: recovery, peak, recession, and trough.
In the recovery, the economy is growing. It is commonly indicated by a bull market. The
recovery is the increase in the rate of economic activity established by a moderate to low
unemployment percentage, towering development, and swelling prices. The next phase of the
business cycle is the peak. The peak is the most desired stage for it is the superior point of the
cycle. During this stage, the increased consumer confidence translates into higher levels of
business activity. The peak is, "When the economy is overheated, and is in a state of irrational
exuberance," (Inc.com) In other words, the peak is the point at which the economy is as robust as
it can get. Following the peak in the business cycle is the recession. The recession is when the
economy is on the decline and jobs are being lost, unemployment rates soars, and production is
slowing. It identifies the end of a growth interval in the business cycle. Often,

Canada's Business Cycle
Have you ever wondered how in today's society the prices for products and services are increasing
each day and the average house costs around a million and a half? People are now expecting the
economy to go into a depression. This is what is called the business cycle, a cycle or series of
cycles of economic expansion and contraction. The business cycle was first demonstrated the early
1900s in Canada in which it made the time period of a time of prosperity and progress for almost
all Canadians. Throughout the different decades between 1900 and 1930s, Canada has progressed
positively in terms of political, economic and social change. For these changes, it is safe to assume
Canada "grew up" in the early 1900s.
Canada in the early 1900s was struggling...show more content...
This marked the popular invention of two–way voice transmission radio when Reginald Fessenden, a
Canadian–born inventor, made the first wireless radio broadcast on December 23 near Washington
D.C. in the United States; Marconi, who lost out on making the first radio broadcast, succeeded in
receiving the first transatlantic radio message at St. John's, Newfoundland. This event paved the way
towards the invention of the radio and the modern cell phones. The next decade rolled in and along
came progress and prosperity, it started when the popularity of the automobile was increasing,
horse–drawn carriages were falling out of trend and automobiles replaced it as the primary

Stages of a Business Cycle
STAGES OF A BUSINESS CYCLE
RECESSION A recession–also sometimes referred to as a trough–is a period of reduced economic
activity in which levels of buying, selling, production, and employment typically diminish. This is
the most unwelcome stage of the business cycle for business owners and consumers alike. A
particularly severe recession is known as a depression.
RECOVERY Also known as an upturn, the recovery stage of thebusiness cycle is the point at which
the economy "troughs" out and starts working its way up to better financial footing.
GROWTH Economic growth is in essence a period of sustained expansion. Hallmarks of this part of
the business cycle include increased consumer confidence, which translates into higher levels of
...show more content...
MOMENTUM Many economists cite a certain "follow–the–leader" mentality in consumer spending.
In situations where consumer confidence is high and people adopt more free–spending habits, other
customers are deemed to be more likely to increase their spending as well. Conversely, downturns in
spending tend to be imitated as well.
TECHNOLOGICAL INNOVATIONS Technological innovations can have an acute impact on
business cycles. Indeed, technological breakthroughs in communication, transportation,
manufacturing, and other operational areas can have a ripple effect throughout an industry or an
economy. Technological innovations may relate to production and use of a new product or
production of an existing product using a new process. The video imaging and personal computer
industries, for instance, have undergone immense technological innovations in recent years, and the
latter industry in particular has had a pronounced impact on the business operations of countless
organizations. However, technological innovations–and consequent increases in investment–take
place at irregular intervals. Fluctuating investments, due to variations in the pace of technological
innovations, lead to business fluctuations in the economy.
There are many reasons why the pace of technological innovations varies. Major innovations do not
occur every day. Nor do they take place at a constant rate. Chance factors greatly influence the

Powerpoint Business Cycle
The PowerPoint is going to talk about the basic economic cycle and how it relates to the market
The business cycle will also be discussed and the impact it has on employment, the market, the
inflation as well as demand and supply.
The stock market cycle and its relationship to the economic or business cycle will be discussed.
The business cycle is a cycle the economy goes through every 7 to 10 years.
It is very unpredictable due to constant change in the market. Each stage of the cycle differs on
length of time based on market and outside factors.
The business cycle is comprised of 2 main phases: the expansion phase– occurs when the economy is
growing; and the recession phase– occurs when the economy is dwindling.
Each phase has defined emotions that affects the...show more content...
Most often moderate inflation occurs, but must be controlled by the government in order to maintain
stability.
The cycle will continue until there is a destabilization in the market, causing recession to occur.
The expansion phase can be divided into 3 phases: the recovery phase, the early phase and the late
phase.
The expansion phase can be split into 3 phases:
Recovery Phase
Most people in this phase are still cautious of the market due to the recent recession or depression.
The stock markets slowly rises as commodities rise. Also the inflation rate falls in order to reflect the
situation of the market.
Early Phase
People are becoming more confident in the market and are willing to invest more.
The economy is more stable, causing the stocks to continually become strong.
Late Phase
There is an excessive confidence in the market, causing people in unnecessarily spend.
Inflation rates start to rise as price, demand and supply increases.
The market suddenly begin to fall, causing the economy to being the recession/depression

Explain The Four Phases Of Business Cycle
Understanding business cycles is the essence of a course in macroeconomics. The term business
cycle is an economy cycle also known as trade cycle which refers to aggregate production. It refers
the periodic but irregular upward and downward activity over several months or years in the market
economy. In another word we can say that 'Abusiness cycle occurs due to the fluctuations that an
economy experiences over time resulting from changes in economic growth.' A business cycle is
typically characterized by four phases–Expansion or prosperity, recession, depression and
recovery–that repeat themselves over time.
Here I am showing the diagram of four phases of business cycle – The business cycle starts from the
lower point and passes through...show more content...
Here we should not be confused by the terms 'invention and innovation'. Invention is like discoveries
of something new but the term innovation is the application form states inventions to actual
production. However, in way of economic term innovation means the commercial application of
inventions such as new techniques of production, new methods of organization etc. Advocates of a
free market might be attracted by this theory because it emphasizes enormous innovative power in

Effects of Business Cycles
Introduction In general the economy tends to experience different trends. These trends can be
grouped as the business/trade cycle and may contain a boom, recession, depression and recovery. A
business/trade cycle (see figure 1) is the periodic but irregular up–and–down movements in
economic activity, measured by fluctuations in real Gross Domestic Product (GDP) and other
macroeconomic variables. Samuelson and Nordhaus (1998), defined it as 'a swing in total national
input, income and employment, usually lasting for a period of 2 to 10 years, marked by widespread
expansion or contraction in most sectors of the economy'. These fluctuations in economic activity
usually have implications on employment, consumption, business confidence,...show more content...
USA budget deficit, which for 2006 fell to $247.7 billion, the lowest in four years is of much
concern. The September 11 terrorism attacks has aided to the retrenchment of economic activity
and this has also affected the level of confidence in businesses and consumers. In 2000, consumer
debt growth of 8.6% compared with real disposable income growth of 4.8%. During the first
quarter of 2006, private household debt grew to 11.6% annually compared with zero real
disposable income growth. The thriving technology in the USA led to a large number of
investment in information processing equipment and software resulting in high equity values
which also resulted in a decline by the second quarter of 2000. In October 2001employment fell
by 439,000 jobs, and unemployment rate soared from 4.9% to 5.4%. Over 500,000 jobs were lost in
the recession and a further one million jobs were destroyed in the weak "job–loss" recovery from
November 2001 to June 2003. People who lived below the poverty line jumped from 31.06 million
to 34.06 million by 2002. This recession could have been avoided, however the argument against
government intervention using discretionary fiscal policy to tackle recession accentuates the long
time lags involved in altering fiscal policy in USA. There was proof in 2000 that the USA
economy was slowing. Congress passed a tax cut in 2001, but it took Congress until March 2002 to
pass the Economy Recovery Act to provide further inducement to the

Effect Of The Business Cycle Essay
This study uses time–series data from the CPS March data to investigate the effect of the business
cycle from 2003 to 2014 on the wage differentials between females and males. The CPS is a
monthly sample survey of approximately 60,000 households conducted by the Census Bureau for
the Bureau of Labor Statistics, which can be considered as the primary source of labor force
statistics for the population of the United States. This study also uses data from the Local Area
Unemployment Statistics (LAUS) to get the state unemployment rate from 2003 to 2014. LAUS is a
Federal–State cooperative effort that publishes monthly estimates of employment and
unemployment for approximately 7,300 areas, including all states, countries, metropolitan areas, and
cities with a population of 25,000 or more, by residence. Labor force data from the LAUS program
follows the same CPS concepts and definitions used for the national labor force data. In particular,
this study uses the seasonal adjustment monthly state unemployment rate, which eliminates the
influences of weather, holidays, the opening and closing of schools, and other recurring seasonal
events from economic time series. Since the CPS collects data through interviewing a limited
amount of people, it cannot fully represent the labor market of the United States because of the
sample selection bias. Also, since the CPS data is gathered by interviews, the status of survey
respondents is only determined by how they respond to the survey.

Macro Economics
Business Cycles
Business Cycles
в–є The value of real GDP over time shows periodic
fluctuations in its movement
в–є The business cycle refers to the periodic fluctuations
of economic activity about its long term growth trend
в–є The Business cycle is the more or less regular pattern
of expansion (recovery) and contraction (recession) in economic activity around the path of trend
growth.
п‚§ At cyclical peak, economic activity is high relative to trend п‚§ At a cyclical trough, the low
point in economic activity is reached.
The business cycle
Potential output
Real GDP
3
3
2
2
4
41
1
O fig Time
Trend output
4
Actual output
4
Business Cycles

в–є The trend path of output is the smooth path of...show more content...
ers
Interest Rate Spread
Delivery Times
Stock Prices
New Building Permits
Average Work Week
Unemployment Claims
Indicators of Business Cycle
Co–incident Indicators
Payroll employment
Personal income
Manufacturing and trade sales
Industrial production
Indicators of Business Cycle
Lagging Indicators
Unemployment
duration
Inventories to sales ratio
Inflation rate for services
Outstanding commercial loans
Consumer credit to personal income ratio
Prime interest rate
Need for Macroeconomic Stability
в–є
Large fluctuations in output, employment and inflation add to uncertainty for businesses and
consumers, and can reduce the economy 's long–term growth potential
в–є
Stability allows businesses, individuals and the government to plan more effectively for the long
term, improving the quality and quantity of investment in physical and human capital and helping to

raise productivity Stabilization Policies
пѓ
Stabilization Policies: Actions taken to impact aggregate demand to moderate the expansion and
contraction phases of the business cycles
пѓ
Stabilization policies are fiscal and monetary policies used to combat the cyclical movements
Purpose:
пѓ
During an economic expansion moderate the growth rate of aggregate spending (equitable
distribution)
пѓ
During an economic contraction (recession) increase the aggregate spending
Stabilization Policies
пѓ
Monetary Policy:
Aims to

Business Cycle Essay
In everyday society, companies are affected by the economy. The company either suffers or
benefits depending on what kind of economy it is. This will depend on what kind of company it is,
and what kind of market the business does well in. The Business Cycle is what determines this
factor. It is a term used in economics to designate changes in the economy.
Timing of the business cycle is not predictable, but its phases seem to be. Many economists site four
phases–prosperity, liquidation, depression, and recovery. During a period of prosperity, a rise in
production leads to increases in employment, wages, and profits. Obstacles then begin to obstruct
further expansion. Production costs can increase, helping create a rise in prices, and...show more
content...
Peapod, is an Internet grocer that provides online grocery shopping to various cities across the
country. In an economy where unemployment is rapidly decreasing , anything that can allow people
to get things done easily and swiftly are greatly appreciated. Since Americans work more hours than
any other country in this world, Peapod can only benefit from everybody's inability to not stop
working. Nobody has enough time to do the little things, like get gas, go grocery shopping, etc....
Society is also willing to pay the extra bucks to have the groceries hand delivered to their doors
because grocery shopping is a hassle and its annoying. No one likes doing it but it is something you
have to do, might as well have someone else do it for you. Peapod is a sure thing for the next
millennium.
FannieMae is a company that makes capital by lending money to people who need mortgages and
by borrowing money at low interest rates. FannieMae is able to make money in any kind of
economy. During times of low interest rates they make money on people who bought fixed rate
mortgages at a time of high interest rates. They also have a hard making money during this time
because their marginal percentage is smaller and they make less of a profit. During times of high
interest rates, they lose money on people who bought fixed rate mortgages at low interest rates.
They also make a lot of assets during this time because they borrow from the federal reserve or
banks at lower interest rates and lend

Planning Cycle : Business Planning
Part 2 Planning Cycle: Business planning is a statement of business goals, how they can be attained
and plans for reaching them. When the existing business is to be taken to India a minimum 3– 5
years of business plan is required, because the investors has to look for their annual return in that
timeframe. It is rightly said that – "Failing to plan is, planning to fail." There are five steps involved
in planning cycle. 1.Defining the mission statement. 2.Defining the current status of the business.
3.Determining corporate strategy. 4.Identifying international opportunities. 5.Revising the business
plan. 1.Defining the mission statement The mission behind launching Tim Hortons in India is – "to
deliver superior quality products and services for the guests and communities through leadership,
innovations and partnerships." TIM HORTONS Each business has a mission statement before it
come into existence or reopens in the target market. Likewise, in India there are several coffee shops
and they all have one or the other mission statement. CAFГ‰ COFFEE DAY Mission Statement–
To be the best cafГ© chain by offering a world class coffee experience at affordable prices. COSTA
COFFEE Mission Statement – Our mission has always been to save the world from mediocre
coffee. 2.Defining the current status of the business At current, Tim Hortons is the leading coffee
brand in Canada. Out of 10 coffee cups sold in Canada 8 are of Tim Hortons'. This is all because it
has

Mexico Business Cycle
Mexico's Business Cycle
The term business cycle or economic cycle refers to the fluctuations of economic activity around its
long–term growth trend. It involves shifts over time between periods of relatively rapid growth of
output–recovery and prosperity, and periods of relative stagnation or decline– contraction or
recession. These fluctuations are often measured using real gdp.
Despite being termed cycles, these fluctuations in economic growth and decline do not follow a
purely mechanical or predictable periodic pattern. In recent years economic theory has moved
towards the study of economic fluctuation rather than a 'business cycle '. Some economists believe
calling the business cycle a "cycle" to be a misnomer, because of...show more content...
Since the nature of the financing flows to Mexico were short–run, the vulnerability of the economy
increased due to these adverse shocks, resulting in capital outflows and a collapse of the exchange
rate and output. 1995–99 saw a recovery of the economy after the implementation of an IMF
supported adjustment program including support schemes for the banking industry, a floating
exchange rate, the tightening of monetary policy, fiscal consolidation and restrained income policies.
This resulted in an improvement of the economic situation and real gdp grew at about 5% per year.
Examining of the occurrences in these periods can assist in identifying possible sources of Mexican
business cycles. They include– Pol*i*tical cycles– Short term rule by autocratic governments,
without reelection possibility, neglect long run benefits of public goods and confiscate assets that
generate long term flows of resources The mayke distorted policy decisions and reduce bothe quality
and quantity of public goods. Investors and consumers delay private decisions and economic activity
declines as uncertainity in the economy increases proportionally to the end of the presidential term.
In the context of autocratic govts, financial crisis is endogenous to the political cycle.
Exchange rate

Business Cycle
ASSIGNMENT 1
Introduction
In macroeconomics, business cycle played an important role to show what a national economy is
going; therefore, this essay will define what business cycle is and its characteristics. Besides, all of
variables such as Real Gross Domestic Product (RGDP), inflation and unemployment rate and their
behaviour in the business cycle will be also demonstrated in the second part. The final part of this
essay will analyse and compare the situation of Australian economy and USA economy in period of
10 years since 1998 based on the concept of "the business cycle". In addition, this is the writer's
opinion about the business cycle relied on these above data about exhibit Australian and USA
economy performance.
WHAT IS...show more content...
3. Unemployment:
_The economic problem happened when people who have abilities to work but they cannot find the
job
_It caused by:
+The nature of changes in the structure of the economy (structural unemployment includes seasonal
unemployment)
+ People leave a job to find a new one (frictional unemployment)
+The level of demand in the economy is not sufficient to sustain full employment (cyclical
unemployment) (Hansen, 2008).
Australian Economy VS USA Economy
Differently, a fiscal or financial year of each country is not the same. Normally, the financial year
in Australia starts at 1 July of precious year and finish at 30 June of next year. In contrast, the
financial year in US starts at 1 November of precious year and finish at 30 September of next year.
Therefore, the statistics of Australia and US was gathered at the end of financial year of each year
since 1999.
|Country | Australia statistics | USA statistics |
| | | |
|Year | | |

The And Third Steps Of The Business Cycle Essay
iUser Accessories
Jack and Sarah are between the second and third steps of the business cycle, they have developed a
business idea and are preparing to move their idea into a firm. The name they chose for their new
firm is iUser Accessories this is a tentative name that takes advantage of the Internet Domain name, a
non–traditional barrier to entry. The have decided not to Advertise until a trademark attorney is
consulted. This ethical decision will save them from being sued in the future from theft of
intellectual property. Other non–traditional barriers they utilize are first mover advantage and new
approach to an industry. Thebusiness they are intend to try will place 10 kiosks in malls and other
high traffic areas that sell accessories for the iPhones, iPads, and iPods. In addition, they have
created a series of short videos that help users make better use of their devices. These videos will
be available through their web site or an app they are developing, these online options will charge a
one–time fee for access. They are going to use these online resources as a part of their marketing
strategy by offering promotions here.
The business plan was developed in a business class, then refined, and submitted for a business plan
competition. That same business plan won the competition giving them 10,000$ to work with.
Winning this completion shows the business plan is complete and that Sarah and Jack have enough
passion stick with their plan after the class ended and

Business Cycle And Recovery Period Analysis
Introduction The period following a recession, where the GDP of the economy is increasing, is
encapsulated in the term 'recovery'. Subsequently, an increase in national output would ensue, thus
prompting the recovery and growth of the economy. As opposed to the previously existent
contractionary period, the economy would now be working at higher capacity allowing factors such
as the rate of unemployment to decline, in addition to increasing productivity. Illustrated in the
diagram below shows the business cycle and recovery period. As shown in the diagram, the recovery
stage occurs between the trough (the lowest point in the graph, and where the real output is equal to
the potential output. Impact on values of imports The term...show more content...
Nevertheless, despite a decline in quantity demand for these good and services, the resultant
increase in price may balance the decline that occurred to the demand. Thus, as a result of the
elasticity of price of imported goods, the increase of price affecting imports, caused by
deprecation of currency, may ultimately have negligible effect on the value of imports, and
might possibly even cause it to increase. Additionally, despite the depreciation of the British
pound in 2007, the UK's economy experienced a 3.1% increase in imports. This is a result of the
UK economy being at a stage of recovery, which would cause to increase imports, as the
manufacturing division would import an increased amount of foreign products. Thus, it is
plausible that a fall in the value of the GBP, which would inevitably cause an increase in price of
imports, may prompt the value of imported goods and services to remain stagnant or decrease. Due
to decreased labour productivity In the instance of a decline in the labour productivity of the UK in
its entirety, a decline will consequently occur in the general production of goods in the country. This
would trigger a chain of events that would concomitantly increase the cost of production per unit
for the producers, causing the supply to decrease, regardless of the price it is sold at. These
circumstances would result in a reduction of the aggregate supply (AS) of the

Business Cycle Theories : A General Comparison
Business Cycle Theories: A General Comparison
Maria Sciarrino
Niagara University
ECO101HON
Business Cycle Theories: A General Comparison
Throughout history, economies have experienced times of high growth and low unemployment as
well as times of little or negative growth and high unemployment. It is controversial whether or not
these instances occurred from regular fluctuations in the market. These alternating up and down
fluctuations typically occur over several years, with each individual cycle varying in length and
intensity. These fluctuations are known as business cycles, which have four phases. When the cycle
is at its peak, the economy is nearly at full employment and the economy is producing at or nearly at
full...show more content...
The differences and similarities of these four theories is the main focus of this paper.
Real Business Cycle Theory (RBC) defines the business cycle as being driven by unexpected
technology shocks which include any event that alters land, labor, capital, or technology. Positive
real shocks, such as good weather, are said to cause an economic boom. Good weather has a positive
effect on land which increases the production of agricultural goods. Negative shocks tend to cause a
recession. For instance, a plague can wipe out a large portion of a population which decreases labor
and, consequently, productivity falls. It is believed that disturbances from technological shocks will
solve themselves quickly and return to equilibrium without government intervention.
While Real Business Cycle Theory is considered a "supply–side" theory, each type of shock can also
influence demand. "Shifts in technology influence both the supply of goods for a given level of
inputs (work effort in particular), and the demand for goods through its effect on wealth and the
labor/leisure decision" (Plosser, 1989, p. 57). This suggests that the initial shock, which increases or
decreases productivity, will influence work effort and carry out to other sectors of the economy.
RBC models are characterized by agents (firms or households) who make decisions using rational
expectations with the intent of

Business Cycle Essay

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