1. Unit 1 - Understand the Role of Business in the Global Economy
Objective 1.02 – Understand Economic Conditions
Topic – Classification of Economic Conditions

2. Economics
All this production has ups and downs, caused by any number of things.
Layoffs, old equipment, new technology, etc.
Movement of an economy from one condition to another (the ups and downs) make up the Business Cycle
The business cycle has four stages
Prosperity
Recession
Depression
Recovery

3. The Business Cycle- Prosperity
Prosperity – a peak of economic activity
(the good times)
Unemployment is low
Production is high
New businesses open

4. The Business Cycle- Recession
Recession – an economic slow down.
Spending decreases
Demand decreases
Productivity decreases
Unemployment rates rise

5. The Business Cycle- Depression
Depression – a deep recession that lasts for many years.
Very high unemployment
Very low productivity
Shortages in goods (since people aren’t working to produce as much)

6. The Business Cycle- Recovery
Recovery – A rise in business activity after a recession or depression.
Unemployment goes down
Production goes up
Renewed demand

7. The Business Cycle
Recovery
Depression
Recession
Prosperity