1. The Business Cycle

2. The economy of a country refers to things like prices, jobs, wages and employment.
The economy of a country changes from time to time. Boom years are when the economy is strong: plenty of jobs, good wages and low prices
Recession years, and in extreme cases, depression years, are when jobs are scarce, many people are unemployed and people cannot afford to buy many things.

3. The business cycle is the prosperity to poverty cycle (boom / bust cycle) that economies go through.

4. There are 4 stages to the Economic Cycle
Prosperity
Recession
Depression
Recovery

5. 1st stage : Prosperity 1st Stage: PROSPERITY (or boom) CYCLE
Very little unemployment, everyone working
Lots of investment
Consumerist society, everyone buying
New businesses being created

6. 2nd Stage: Recession 2nd Stage: Recession
a recession indicates a downturn in the economy.
Business profits are down
Increasing Unemployment
Lack of investment

7. 3rd Stage: Depression 3rd Stage: Depression (the worst stage)
Unemployment is massive.
No new jobs created.
Government must intervene with stimulus (creating jobs)
No one is buying anything, saving instead.
Businesses are going bankrupt

8. 4th Stage: Economic Recovery
Some new jobs being created,
Investment in new companies begins
Optimism returns, people start buying things again

9. Economic Cycle…
It is important to note that not every stage occurs, or occurs in order.
In the 1920’s-30’s Stage 4 was hit.
In the 1980’s Stage 3 was hit (Economic Recession) but stage 4 was avoided….

10. 1st Stage of Economic Boon: - Everyone working - Lots of investment
2nd Stage: Increasing Unemployment.
Lack of investment
3rd Stage: -Unemployment is massive.
- No new jobs created.
-Government must intervene with stimulus
- no one is buying anything, saving instead.
1st Stage of Economic Boon:
- Everyone working
- Lots of investment
- Consumerist society, everyone buying
4th Stage: Some new jobs being created,
Investment in new companies begins
- Optimism returns, people start buying things again