1. Life Within the Business Cycle

2. Business Cycle The repeated rise and fall of economic activity over time

3. Business Cycle The repeated rise and fall of economic activity over time The Business Cycle is divided into four sections: (graph on next slide) –Expansion –Peak –Contraction –Trough

4. Four Sections of Business Cycle Expansion Peak Contraction Trough

5. Recessions occur in the lower part of this process

6. In a recession, producers of durable goods are hurt the most

7. Recessions occur in the lower part of this process In a recession, producers of durable goods are hurt the most –A product that has an expected life span of several years, and tend to be relatively expensive

8. Recessions occur in the lower part of this process In a recession, producers of durable goods are hurt the most –A product that has an expected life span of several years, and tend to be relatively expensive –Ex. Cars, appliances, furniture

9. Recessions occur in the lower part of this process Nondurable goods do not change as greatly in a recession

10. Recessions occur in the lower part of this process Nondurable goods do not change as greatly in a recession –Goods that are intended for immediate use and are less expensive

11. Recessions occur in the lower part of this process Nondurable goods do not change as greatly in a recession –Goods that are intended for immediate use and are less expensive –Ex. Food and clothing

12. Forecasting the Cycle The department of commerce will issue reports that warn of leading indicators

13. Forecasting the Cycle The department of commerce will issue reports that warn of leading indicators –These are signs that the economy may undergo a change

14. Forecasting the Cycle The department of commerce will issue reports that warn of leading indicators –These are signs that the economy may undergo a change They monitor things like: building permits, store inventories, orders for new goods

15. Forecasting the Cycle The department of commerce will issue reports that warn of leading indicators –These are signs that the economy may undergo a change They monitor things like: building permits, store inventories, orders for new goods –If a store has to order new goods, it is a sign that the economy is improving

16. Forecasting the Cycle This info is very important to businesses because it may change the way that they do business –Ex. If a down-turn is predicted they will not hire

17. Forecasting the Cycle This info is very important to businesses because it may change the way that they do business –Ex. If a down-turn is predicted they will not hire However, there is no guarantee from these indicators

18. Today’s DFR Names Abbreviation # of shares you are offering for sale # of shares you sold today Highest price paid for share today –If that last items are 0, then write 0 and what price you are asking?