Boom - Phases of business cycle

Question

Explain about the term Boom in phases of business cycle.

Answer 1

Boom:

The products in such phase fetch an above normal price that is above higher profit. It attracts more and more investors. The existing production capacity is used at its occupied capacity. More and more new types of machines are made use of the business of the capital goods industry as well shoots up. The price of the production factors increases. Other workers are employed at higher wage rate. The raising cost tendency of the factors of production taken into a continuous increase in product cost. There fixed income group on the salaried class fined this difficult to cope along with this raise in prices. The income does not rise accordingly and they are now compelled to decrease consumption. The demand is here more or less stagnant or this even decreases. Therefore boom or prosperity reaches its peak.