business cycles and the entrepreneur

the nature of the business cycle

recovery

peak

contractions

slump

negative real gdp growth

low demand for goods, high job loss, rising unemployment, low levels of consumer and business confidence

v sharpe( fast recovery) u shape and L shape (slow)

starts to show positive real gdp growth

high real gdp growth rates, sustained positive employment

when real gdp and employment grow rates decline

consumer and business conformance levels start to decline

definitions

recession * (decline in GDP for more than two consecutive quarters

depression a recession that lasts longer

ensuring profitability during the different phases of the business cycle

the relevance of the business cycles to the entrepreneur

industry turnover trends across different enterprise sizes

incorporating business cycle forecasts into business plans

a failure to base business decisions on the business cycles can often have disastrous consequences foe the entrepreneurs.

business cycle forecasts are freely available from a large number of institutions

entrepreneurs use such information to

to anticipate changes n demand and supply

to realign capital overheads

to make inventory decisions

to decde on the welfare of human resources

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