Effects - Business cycle have's significant effects on various aspects of the economy such as employment, consumer spending, interest rates, investment, inflation, and government policies. During an expansion, the economy grows and people tend to spend more, while during a contraction, the economy shrinks, and people tend to spend less. Governments may try to mitigate the effects of the business cycle by implementing various policies.
Microeconomic Effects - The effects of the business cycle on individual businesses, industries, and households. During an expansionary phase, businesses may experience increased demand for their products and services, leading to increased revenue and profits. Conversely, during a contractionary phase, businesses may experience decreased demand, leading to lower revenue and profits.
" macroeconomics, which is concerned with how the overall economy works. It studies such things as employment, gross domestic product, and inflation—the stuff of news stories and government policy debates. Little-picture microeconomics is concerned with how supply and demand interact in individual markets for goods and services." (Rodrigo, 2010)
Macroeconomic Effects - The effects of the business cycle on the broader economy as a whole. During an expansionary phase, GDP tends to grow, inflation may increase, and interest rates may rise. Conversely, during a contractionary phase, GDP tends to decline, inflation may decrease, and interest rates may fall.
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