Module 14 Lesson Mastery Assignment
By: Isabella Arnot
Business Cycle Phase One: Prosperity/Peak
In this phase, the unemployment remains low, and income is relatively high. Producers then begin to expand businesses to take advantage of marketplace opportunities. The CPI, GDP, and per capita GDP is high. The consumers have confidence about the future state of the economy which leads to more purchases, which mean that people will feel relaxed and proud that the economy is some-what thriving
Business Cycle Phase Two: Recession/Contraction
In a recession, there is an economic downturn that lasts for 6 months or longer. Consumers postpone major purchases, and they will begin to buy low priced products that satisfy there needs, instead of their wants. Producers slow down production and cut the size of their workforce and cut wages/salaries, and trade decreases. In this phase, the state economy is not doing very good and people are starting to ration important things and cut down on the buying of non-needed things
Business Cycle Phase Three: Depression/Trough
In cycle three, a recession turns into a depression, with an even further decrease in employment and consumer spending and unemployment rate is extremely high. Producers will end up creating less goods and services because there are fewer people who were able to buy their goods and services. CPI, GDP, and per capita GDP are at there lowest points and banks decrease credits even further and it is even harder to get a loan. The economy at this point is doing really bad and people are going to have to make serious cuts in there daily life if they want to continue to prosper
Business Cycle Phase Four: Recovery/Expansion
In the recovery stage, consumer spending does increase and people start to buy goods again. The unemployment rate begins to decrease because businesses seek additional workers to create more good and services one spending increases. CPI, GDP, and per capita GDP begin to increase again, and banks begin to expand credit. The economy at this point is doing better and people are starting to have faith again. Now people can start to buy not just there wants, but there needs again