Transcript Stages of the Business Cycle

Impact of the Business Cycle
Unit 1 Topic 1.5 Yr10
Lesson Objectives
1. At the end of today's lesson you will be able to
understand what the Business Cycle is
2. Demonstrate the impact the Business Cycle has
on businesses
Outcomes
• Identify what the Business Cycle is
• Understand how it is measured
• Demonstrate the various stages and the impact
each stage has on a business
What does this mean to you?
The Business Cycle
‘Fluctuations in the level of economic
activity over a period of time’
GDP
The Business Cycle
Boom
Recession
Recovery
Slump
Time
The Impact on Businesses
High Prices
High Wages
High Consumer Spending
Time
The Impact on Businesses
High Prices
High Wages
High Consumer Spending
Businesses look for other
markets
Investments Fall
Low Profits
Redundancies
Time
The Impact on Businesses
High Prices
High Wages
High Consumer Spending
More redundancies
Consistent high
unemployment
Low Consumer Spending
Shops/Factories Close
Businesses look for other
markets
Investments Fall
Low Profits
Redundancies
Time
The Impact on Businesses
High Prices
High Wages
High Consumer Spending
More redundancies
Consistent high
unemployment
Low Consumer Spending
Shops/Factories Close
Businesses look for other
markets
Investments Fall
Low Profits
Redundancies
Increased production
Wages rise
Unemployment declines
Consumers start to spend
more
Time
Lesson Objectives
1. At the end of today's lesson you will be able to
understand what the Business Cycle is
2. The effect the Business Cycle has on businesses
Outcomes
• Identify what the Business Cycle is
• Understand how it is measured
• Demonstrate the various stages and the effect
each stage has on the business cycle
Group Slump
• What is a slump?
• Identify three effects that are likely to occur to
a small business in the event of a slump
Group Boom
• What is a boom?
• Identify three effects that are likely to occur to
a small business in the event of a Boom
Group Recession
• What is a recession?
• Identify three effects that are likely to occur to
a small business in the event of a recession
Group Recovery
• What is a recovery?
• Identify three effects that are likely to occur to
a small business in the event of a recovery
Group Definition
• In your own words and in your own way,
define and explain the terms:
• Economic Growth
• Economic Activity
• The Business Cycle
• The Economy
• Luxury goods
• Necessities
Q.17 May 2011 Paper
Identify three likely effects on a business of a
downturn in the business cycle
a) Higher sales due to rising consumer incomes
b) Lower fixed costs due to lower interest rates
c) Less risk of the business becoming insolvent
d) More difficult to recruit employees
e) Lower demand due to business closures
f) Lower prices on goods bought from suppliers
Q.17 May 2011 Paper
Identify three likely effects on a business of a
downturn in the business cycle
a) Higher sales due to rising consumer incomes
b) Lower fixed costs due to lower interest rates
c) Less risk of the business becoming insolvent
d) More difficult to recruit employees
e) Lower demand due to business closures
f) Lower prices on goods bought from suppliers
Plenary
• Lesson 34
• Plenary section fill in the ‘Missing Words’ and
‘Test Yourself’