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The Business Cycle

An Economic Concept. The Business Cycle. What is it?. The cycle of economic growth and decline of a given economy There are FOUR stages: Expansion Recession Depression Recovery. Expansion. Flourishing Economy. Consumers have a hopeful outlook about business and the economy

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The Business Cycle

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  1. An Economic Concept The Business Cycle Marketing

  2. What is it? The cycle of economic growth and decline of a given economy There are FOUR stages: Expansion Recession Depression Recovery

  3. Expansion Flourishing Economy • Consumers have a hopeful outlook about business and the economy • Good time to start a business • Period of prosperity • Low unemployment • Increase in output of goods and services • Higher consumer spending Expansion continues until it reaches a peak This peak signifies the end of the expansion and the beginning of a recession

  4. Recession Economic Slowdown • Lasts at least 6 months • Significant decline in economic activity • Companies reduce workforce • Consumers have less money to spend Recession ends once an economy reaches its trough (lowest point) and then begins to rise

  5. Depression Prolonged Recession • Becomes nearly impossible to find a job • Many businesses are forced to shut down • Consumer spending is very low • Unemployment is very high • Production of goods and services is down • Many people cannot afford to meet their basic needs

  6. Recovery Renewed Economic Growth • This is where the cycle begins again • Business picks up • People start to find jobs • Demand for goods and services increases

  7. The Business Cycle Peak Expansion Recession Recovery Depression Trough

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