Please enable JavaScript.

Coggle requires JavaScript to display documents.

Economic Cycles, Acosta & Franco 9A - Coggle Diagram

- - - - The balance of payments is the record of a country's transactions with the rest of the world over a period of time. It includes exports, imports, and other financial transactions.
        
        When a country exports more goods and services than it imports, it has a surplus in the balance of payments. This means that more money is coming into the country than going out, which can be good for the economy.
        
        A positive balance of payments can help a country avoid borrowing money from other countries at high interest rates. It can also help maintain the value of the country's currency, which is important for international trade.
    - - Unemployment is a measure of the number of people who are actively seeking work but unable to find it.
        
        Governments aim to reduce unemployment because it has several negative impacts on the economy, such as lost output and income, reduced consumption, and increased social costs.
        
        When more people are employed, there is greater demand for goods and services, which can stimulate economic growth. It also means that more people are contributing to the tax base, which can help fund government programs and services.
    - - Inflation is the rate at which the general level of prices for goods and services is rising over time.
        
        A low level of inflation is generally seen as desirable because it means that people can afford to buy more goods and services, and businesses can expand more easily.
        
        When inflation is high, it can erode the value of people's savings and reduce their purchasing power. It can also make it more difficult for businesses to plan and invest.
    - - Economic growth is the increase in the production of goods and services in an economy over time.
        
        A growing economy can provide many benefits, such as more job opportunities, higher incomes, and better living standards.
        
        Governments often try to promote economic growth by implementing policies that encourage investment, innovation, and entrepreneurship. However, it's important to balance growth with sustainability and other social and environmental considerations.
- - - - The growth stage marks the beginning of a recovery from a previous downturn or recession.
        
        During this stage, economic indicators such as GDP, consumer spending, and business investments start to increase.
        
        This stage is characterized by optimism and expansion, with new businesses entering the market and existing ones expanding their operations.
        
        As businesses grow and hire more workers, the unemployment rate decreases, and consumers have more money to spend, leading to an increase in standards of living.
    - - The boom stage is the peak of the business cycle, and it is characterized by high levels of economic activity and optimism.
        
        During this stage, businesses are making record profits, and many sectors of the economy are performing at their best.
        
        Demand for goods and services is high, which can lead to inflation as prices rise.
        
        Unemployment rates are very low, and there are more job opportunities available, which can increase wage costs for businesses.
        
        However, high levels of spending and borrowing can be risky, as the economy may enter a decline if the outlook worsens.
    - - The recession stage is characterized by a decline in economic activity, often due to a shock to the economy such as a financial crisis or a natural disaster.
        
        During this stage, businesses become more cautious and may cut back on investments and hiring, which can lead to rising unemployment and falling consumer spending.
        
        As demand for goods and services decreases, businesses may see their profits decline, and some may even close down.
        
        This stage can be prolonged, and it may take some time for the economy to recover and return to the growth stage.
    - - The slump stage is the worst part of the business cycle, and it is characterized by very low levels of economic activity and pessimism.
        
        During this stage, businesses are reluctant to invest or expand, and many may close down entirely.
        
        There is little demand for goods and services, and unemployment rates are very high, which can lead to lower standards of living for many people.
        
        This stage is often a result of a prolonged recession, and it may take significant government intervention or external factors to kickstart the economy back into the growth stage.