--%>

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 : What are the various fields of Economics

    What are the various fields of Economics? Explain.

  • Q : Income effect of increase wage When the

    When the income effect of a wage raise is more powerful than the substitution effect, in that case the:  (i) labor supply curve will be “backward bending.” (ii) unemployment rate will rise since more people will be av

  • Q : Demand for labor in competitive firm

    Demand for labor of this purely competitive firm in given figure corresponds to: (1) line segment ab. (2) line segment bd. (3) line segment be (4) line segment df. (5) line segment dg.

    Q : Estimate average wage differentials

    From the fact which the average wages of women into the United States is lower than the average wages of men, we can estimate that women are: (1) discriminated against in hiring and pay. (2) less qualified workers than men. (3) less interested into wa

  • Q : Why is wealth definition of economics

    Why is wealth definition of economics criticized?

  • Q : How most goods and resources are

    In countries employing decentralized markets for nearly all decision making: (1) Private individuals select how most resources and goods are allocated. (2) Nonhuman resources should be individually owned. (3) Elaborate economic plans are planned and enforced by law. (

  • Q : Government license in operating

    Gilligan is hiring new workers to help run his Island Getaway resort. Gilligan makes a decision that he will not hire a new worker unless they have been properly trained and certified into wilderness survival and have a license by the government to operate watercraft.

  • Q : Profit price by earning in Human capital

    As per demonstrated in this graph, there average college graduate will earn around: (1) $12,000 yearly. (2) $20,000 yearly. (3) $45,000 yearly. (4) $90,000 yearly. (5) $100,000 yearly.

    Q : Define the difference between

    Define the difference between accounting and economic cost.

  • Q : Explain the meaning of price Explain

    Explain the meaning of price.