Life Within the Business Cycle Business Cycle The
Life Within the Business Cycle
Business Cycle The repeated rise and fall of economic activity over time
Business Cycle The repeated rise and fall of economic activity over time The Business Cycle is divided into four sections: (graph on next slide) – Expansion – Peak – Contraction – Trough
Four Sections of Business Cycle Peak Expansion Contraction Trough
Recessions occur in the lower part of this process
Recessions occur in the lower part of this process In a recession, producers of durable goods are hurt the most
Recessions occur in the lower part of this process In a recession, producers of durable goods are hurt the most – A product that has an expected life span of several years, and tend to be relatively expensive
Recessions occur in the lower part of this process In a recession, producers of durable goods are hurt the most – A product that has an expected life span of several years, and tend to be relatively expensive – Ex. Cars, appliances, furniture
Recessions occur in the lower part of this process Nondurable goods do not change as greatly in a recession
Recessions occur in the lower part of this process Nondurable goods do not change as greatly in a recession – Goods that are intended for immediate use and are less expensive
Recessions occur in the lower part of this process Nondurable goods do not change as greatly in a recession – Goods that are intended for immediate use and are less expensive – Ex. Food and clothing
Forecasting the Cycle The department of commerce will issue reports that warn of leading indicators
Forecasting the Cycle The department of commerce will issue reports that warn of leading indicators – These are signs that the economy may undergo a change
Forecasting the Cycle The department of commerce will issue reports that warn of leading indicators – These are signs that the economy may undergo a change They monitor things like: building permits, store inventories, orders for new goods
Forecasting the Cycle The department of commerce will issue reports that warn of leading indicators – These are signs that the economy may undergo a change They monitor things like: building permits, store inventories, orders for new goods – If a store has to order new goods, it is a sign that the economy is improving
Forecasting the Cycle This info is very important to businesses because it may change the way that they do business – Ex. If a down-turn is predicted they will not hire
Forecasting the Cycle This info is very important to businesses because it may change the way that they do business – Ex. If a down-turn is predicted they will not hire However, there is no guarantee from these indicators
Today’s DFR Names Abbreviation # of shares you are offering for sale # of shares you sold today Highest price paid for share today – If that last items are 0, then write 0 and what price you are asking?
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