Business Cycle: By-Shivangi Dubey
Business Cycle: By-Shivangi Dubey
Business Cycle: By-Shivangi Dubey
by-
Shivangi Dubey
Business Cycle
Expansion (Growing)
Peak (Top)
Contraction (Shrinking)
Trough (Bottom)
Business Cycle
Peak
Peak
Trough
Expansion
• During a period of expansion:
– Wages increase
– Low unemployment
– People are optimistic and spending money
– High demand for goods
– Businesses start
– Easy to get a bank loan
– Businesses make profits and stock prices
increase
Peak
1. Business Investment
When the economy is expanding, sales and
profit keep rising, so companies invest in
new plants and equipment, creating new
jobs and more expansion. In contraction, the
opposite is true
What Keeps the Business Cycle
Going?
2. Interest Rates and Credit
Low interest rates, companies make new
investments, adding jobs. When interest
rates climb, investment dries up and less job
growth
3. Consumer Expectations
Forecasts of an expanding economy fuels more
spending, while fear of a recession
decreases consumer spending
Thankyou