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THE BUSINESS CYCLE :silhouettes: - Coggle Diagram
THE BUSINESS CYCLE
:silhouettes:
PHASES
PEAK
GDP growth reaches its maximum
Pressures
High point of economic
CONTRACTION
Decreased production
Eployment
Consumer Spending
Falling GDP
Business investments
Period of economic decline
Rising unemployment rates
Exphansion
Increased consumer spending
Increased production
Increased employment
Rising GDP
Business investments
Low unemployment rates
Economic growth
TROUGH
GDP growth reaches its minimum
High unemployment rate
Lowest point of economic activity within the cycle
Potential deflationary pressures
BUSINESS CYCLE
A recurring pattern of expansion and contraction in economic activity over time
IMPACT OF THE BUSINESS CYCLE
INVESTMENT
Peaks during expansion
Declines during contraction
Business investment
CONSUMER CONFIDENCE
Strong during expansion
Influences purchasing decisions and economic activity
INFLATION
Tends to rise during expansionary phases
Falls during contractions.
EMPLOYMENT
High and low during expansion
Unemployment rates fluctuate with the cycle
FACTORS INFLUENCING THE BUSINESS CYCLE
GLOBAL ECONOMIC CONDITIONS
International trade
Geopolitical events
Currency exchange rates
Impact domestic economic performance
FISCAL POLICY
Government decisions regarding taxation
Affect aggregate demand
CONSUMER AND BUSINESS CONFIDENCE
Sentiment regarding future economic conditions
Influences spending and investment decisions
EXTERNAL SHOCKS
Events such as wars
Natural disasters
Global economic crises.
Disrupt economic activity
Alter the business cycle trajectory
TECHNOLOGICAL ADVANCES
Can accelerate expansion phases of the cycle
Innovations that stimulate productivity
MONETARY POLICY
Influence borrowing costs
Investments
Consumer Spending
Actions taken by central banks to control the money supply.
Interest rates
