Business Cycle
Business: Cambridge International GCSE (2027 Exams), topic 6.1.1
Business Cycle
The economy has a major impact on businesses.
Economic cycles
- The economy is the state of a country’s production and consumption of goods and services. A country’s economy goes through cycles of booms and recessions.
Booms
- A boom is when the economy is growing significantly and the businesses in it are generally doing well.
Growth
- Growth is when the economy is expanding, but not as strongly as during a boom.
- Demand for products is steadily rising, businesses are confident, and employment is increasing.
Recessions
- During a recession, economic output falls (for 2 successive quarters there is negative economic growth) and because of this, businesses usually experience a fall in demand for their products.
Slumps
- A slump is the lowest point in the business cycle.
- The economy is struggling, demand for products is very weak, unemployment is high, and many businesses may fail.
Test yourself on Business Cycle
What are the 2 components of economic cycles?