1 / 8

The Business Cycle

The Business Cycle. A brief background of what it is, why it occurs, and why it is every President’s worst nightmare!. What is it?. What is a Business Cycle A pattern of “up” and “down” economic occurrences that repeat every 4 – 8 years Repeats a minimum of two times per decade

teenie
Download Presentation

The Business Cycle

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The Business Cycle A brief background of what it is, why it occurs, and why it is every President’s worst nightmare!

  2. What is it? • What is a Business Cycle • A pattern of “up” and “down” economic occurrences that repeat every 4 – 8 years • Repeats a minimum of two times per decade • All cycles contain the same patterns • Occurs regularly • All also have the same terms

  3. The Parts of the Business Cycle • #1 = Recession • A recession is very simply defined as “having little money and nothing to buy with what little you have of it”. • All recessions are generally “bad” in nature • All recessions lead to a trough, but not all troughs lead to a depression (see graphic) • In a recession, people usually stop spending money, stop purchasing larges goods/services, and companies lay off workers. • Average time of a recession = 3-5 years • #2 = Trough • Period of time between the downward cycle and the upward cycle leading to recovery • Time of a trough varies depending on steps taken in recession • Fiscal Policy usually determines how long both a recession and a trough will last.

  4. Fiscal Policy • The govt changes the amount of money circulating in society. • Based on the federal interest rate. #1 #2

  5. #3 = Recovery • Recovery occurs when the general nature of the economy is rebounding. • This usually occurs when people begin to spend more money, confidence in the banking system is up, and companies begin to hire more workers. • This is also determined by Fiscal Policy • Lower interest loans means more money “floating” around • When money “floats” things are bought, when things are bought… • #4 = Peak • Period of time between the recovery and recession. • Peaks can last for a decade or more. • Often come to an end when govt feels like there is too much money in the system, and they change fiscal policy

  6. #4 #1 #3 #2

  7. Place These Events on the Business Cycle New Deal Begins Hoover Elected as President Start of WW II Booming 20’s End of WW I Election of FDR New Deal Continues Start of WW II

  8. On your own, place these “modern” events on your own Business Cycle. Each event must have three “bullets” below explaining why you placed that event where you did. Circuit City Declares Bankruptcy War Begins in Iraq Election of Pres. Obama Lockheed Martin Builds 15 F-16s Bank Bailout(s) Terror Attacks of 9/11 Election of Pres. Bush GM Declares Bankruptcy Navy orders 10 New Battleships

More Related