--%>

What are the characteristics of a business cycle

What are the characteristics of a business cycle?

E

Expert

Verified

Characteristics of a business cycle are as follows:

1. This is synchronic. The downward and upward movements tend to arise at all similar period in all industries. The waves of depression or prosperity generate a wave in another industry. While industry picks up to provide more service and more income and so forth to workers and this provides new orders for capital goods and raw materials. It helps other firms to prosper as well.

2. The cycle is a wave-as movement. The era of prosperity and depression can be alternately considered in a cycle.

3. Cyclical fluctuations are recurring within nature. The different phases are repeated is followed through depression and the depression again in followed through a boom.

4. In nature business cycles are cumulative and self –reinforcing. All movements feed on itself and keep up the movement in similar direction. Once booms starts this goes on growing until forces accumulate to reverse the direction.

5. There can be no indefinite eternal or depression boom period. All phase include in itself the seed for other phase. So, the boom, when this reaches its peak, turns to recession.

6. Business cycles are pervasive within their effects. The cyclical fluctuations influence each and every part of the economy. Prosperity or depression felt in one part of the economy makes its impact in other part as well. The cyclical movements are still international in nature. The mechanism of international trade creates the boom or depression in one country shared though other countries also.

7. Presence of a crisis. The down and up movements are not symmetrical. There downward movements are not symmetrical. And there downward movement is more rapid and violent than the upward movement.

   Related Questions in Managerial Economics

  • Q : Learning-by-doing Firms may make use of

    Firms may make use of low prices to enter a market and gain market share therefore is can learn the intricacies of a particular product line or business. It is an illustration of: (1) limit pricing. (2) accommodation. (3) learning-by-

  • Q : Explain the different types of income

    Explain the different types of income elasticity of demand.

  • Q : Substitution Consequence on Labor Supply

    The substitution consequence on labor supply decision of an individual is more powerful than the income effect while: (1) higher wage rates result within increased hours worked. (2) cuts in wage rates yield discouraged worker effects. (3) the supply c

  • Q : Costs and revenue verses Quality

    Refer to figure as in above. What occurs when the firm produces more than Q4 units: w) Its profit raises. x) this makes a loss. y) Its total revenue is increasing quicker than its whole cost. z) this could make a profit or a loss depending upon what occurs

  • Q : Explain the Opinion Survey method of

    Explain the Opinion Survey method of Demand Forecasting.

  • Q : Income effect at a wage rate The

    The substitution effect of a small change within the wage rate for this worker most strongly goes beyond the income effect at a wage rate of: (1) $5 per hour. (2) $10 per hour. (3) $10 per hour to $25 per hour. (4) $2

  • Q : Explain the Geometric Method of

    Explain the Geometric Method of Measurement of Elasticity.

  • Q : Dependency of labor supplies Labor

    Labor supplies depend on wage rates and also: (w) labor force participation and capital availability. (x) worker skills and preferences regarding employment. (y) technology and the price of output. (z) labor force participation and derived demand.

  • Q : Household Assets and the Supply of Labor

    The most valuable assets of many households are the household’s: (1) money and jewelry. (2) homes and real estate. (3) human capital and labor. (4) stocks and bonds. (5) bank accounts. How can I solve my Economics

  • Q : Managerial Economics according to

    Illustrates the managerial Economics according to Savage and John?