Stages of a Business Cycle - 2741 Words

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 the business 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 theShow MoreRelatedThe Four Stages Of The Business Cycle799 Words   |  4 PagesThe 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, â€Å"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). A business cycle is comprisedRead MoreThe Growth And Peak Stage Of A Business Cycle1498 Words   |  6 PagesBusiness cycles contain several stages which span GDP and time itself. These stages are growth, peak, recession and a troug h 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 followsRead MoreA Brief Look at Flipkart1097 Words   |  4 Pagesentrepreneurial life cycle of Flipkart is showed in my report. Entrepreneurial Life Cycle - A Brief Overview: Entrepreneurial life cycle is a series of stages in the survival of a business, from its scratch till present. 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The production system may beRead MoreThe Stages Of The Organizational Life Cycle771 Words   |  4 PagesDaft (2014) believes that the stages of the organizational life structure are sequential and follows a natural progression. Theories relating to the organizational life cycle either include 4 or 5 stages. Churchill and Lewis (1983) propose an alternate theory of the organizational life cycle where there are 5 stages in the business/organizational life cycle and each stage is characterized by the owner’s involvement in the business, strategic goals, organizational structure, and the extent of theRead MoreBCG Matrix and the Product Life Cycle1394 Words   |  6 PagesIntroduction: The BCG Matrix and the Product Life Cycle are two important tools that relate to different aspects of a product’s performance: †¢ The BCG looks at market share and market growth and how they impact on cash usage and generation. †¢ The PLC looks at sales/revenues over time and levels of profitability. 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