Sep 16, 2018 · In one paragraph, explain why a shortened or shrinking business cycle would create problems for many firms. Shortened business cycles can create problems for funding and investment, many new projects will call for more capital and previous project won’t have reached the maturity stage to fund the next project of the company. Other issues are with the market …
Oct 13, 2016 · Explain why a shortened or shrinking business cycle would create problems for many companies There is a rapid decline in national income and expenditure. There is a rapid decline in national income and expenditure . 3. Service is the last activity in the “Value Chain.”.
Another factor of change is a shortened business cycle We are forced to bring products to market faster, to make faster return on investments, and to develop new products more quickly. Explain why a shortened or shrinking business cycle would create problems for many companies. Define win-win strategy, Discuss win-win strategy.
Explain why a shortened or shrinking business cycle would create problems for many companies. Best Answer. This is the best answer based on feedback and ratings. Business cycles in a particular industry are based on the underlying demographics or characteristics of their customer base.
1. Another factor of change is a shortened business cycle %u2013 We are forced to bring products to market faster, to make faster return on investments, and to develop new products more quickly. Explain why a shortened or shrinking business cycle would create problems for many companies.
Business cycles in a particular industry are based on the underlying demographics or characteristics of their customer base. For example, if a business is primarily geared toward servicing the elderly view the full answer
Updated November 27, 2020. The business cycle is caused by the forces of supply and demand— the movement of the gross domestic product GDP—the availability of capital, and expectations about the future. This cycle is generally separated into four distinct segments, expansion, peak, contraction, and trough. You may hear this series referred ...
If demand outstrips supply, then the economy can overheat. Investors and businesses compete to outperform the market, taking on more risk to gain some extra return. This combination of excess demand and the creation of risky derivatives created the housing bubble in 2005. 2
Kimberly Amadeo is an expert on U.S. and world economies and investing, with over 20 years of experience in economic analysis and business strategy. She is the President of the economic website World Money Watch.
Fiscal policy is what elected officials use to change the business cycle. 4 But they disagree on the best ways to implement it. As a result, they don't take advantage of the power of fiscal policy. Expansion: When the economy is in the expansion phase, politicians are content because their constituents are happy.
A contraction causes a recession. 3 Three types of events trigger a contraction. They are a rapid increase in interest rates, a financial crisis, or runaway inflation. Fear and panic replace confidence. Investors sell stocks and buy bonds, gold, and the U.S. dollar.
Expansion: When the economy is in the expansion phase, politicians are content because their constituents are happy. They will pursue other policies, such as foreign affairs, defense, or immigration. Peak: During the irrational exuberance phase, politicians continue to ignore fiscal policy.
That often requires intervention with monetary or fiscal policy. In an ideal world, they work together. That, unfortunately, doesn't occur often enough.
The business cycle are periods of economic expansion and contraction as measured by gross domestic product or a similar measure of economic output. The cause of business cycles is somewhat contested as it is likely that a large number of factors play a role as opposed to a single cause. The following are contributing factors to the business cycle.
Credit Cycle. The credit cycle are periods of credit expansion and contraction that generally coincide with the business cycle. Credit is usually easy to get during an economic expansion as loans are performing well. In a crisis, loans suddenly start to perform badly and banks halt lending.
Fiscal policy is government spending and tax policy. These have an influence on business cycles and can be used as tools to cool an expansion and stimulate a recovery. Expansion. In theory, a government should cut back on spending and increase taxes in an expansion to build reserves to fight the next recession.
In some cases a crisis is caused or made worse by high levels of government debt that necessitate money printing to pay interest leading to high inflation or hyperinflation. Recession. In theory, a government should reduce taxes to stimulate consumer spending and business investment in a recession.
Confidence. The confidence of businesses and consumers plays a role in the business cycle. Confidence is also impacted by the business cycle such that it can be difficult to separate cause from effect. Expansion. The confidence of businesses and consumers surges during an expansion.
Expansion. In an economic expansion, both businesses and consumers may have excess cash to spend and ample access to credit. This buying power and the general feeling of optimism that accompanies an expansion drives increased spending.
Recovery. A recovery can be driven by a return to confidence that causes consumer demand to improve.
John Keynes explains the occurrence of business cycles is a result of fluctuations in aggregate demand, which bring the economy to short-term equilibriums that are different from a full-employment equilibrium.
The first stage in the business cycle is expansion. In this stage, there is an increase in positive economic indicators such as employment, income, output, wages, profits, demand, and supply of goods and services. Debtors are generally paying their debts on time, the velocity of the money supply is high, and investment is high.
A boom is characterized by a period of rapid economic growth whereas a period of relatively stagnated economic growth is a recession. These are measured in terms of the growth of the real GDP, which is inflation-adjusted.
Recession. The recession is the stage that follows the peak phase. The demand for goods and services starts declining rapidly and steadily in this phase. Producers do not notice the decrease in demand instantly and go on producing, which creates a situation of excess supply in the market. Prices tend to fall.
In the depression stage, the economy’s growth rate becomes negative. There is further decline until the prices of factors, as well as the demand and supply of goods and services, contract to reach their lowest point. The economy eventually reaches the trough. It is the negative saturation point for an economy.
After the trough, the economy moves to the stage of recovery. In this phase, there is a turnaround in the economy, and it begins to recover from the negative growth rate. Demand starts to pick up due to low prices and, consequently, supply begins to increase.
Cyclical Unemployment Cyclical unemployment is a type of unemployment where labor forces are reduced as a result of business cycles or fluctuations in the economy, Inelastic Demand. Inelastic Demand Inelastic demand is when the buyer’s demand does not change as much as the price changes.