Module 3 Assignment

MODULE 3 Question 1.1 The business cycle starts from a cashbox (lower distributor point) and passes through a recovery manikin followed by a period of magnification (upper turning point) and prosperity. afterwards the peak point is reached thither is a declining phase of inlet followed by a falloff. Again the business cycle continues too with ups and downs. Prosperity Phase When in that respect is an expansion of takings, income, employment, prices and profits, there is in any case a rise in the standard of living. This period is termed as Prosperity phase. * The features of prosperity argon :- * High aim of output and trade. * High take aim of useful pick out. * High level of income and employment. * Rising interest rates. * Inflation. * Large expansion of bank credit. * overall business optimism. * A high level of MEC (Marginal efficiency of capital) and investment. overdue to extensive employment of resources, the level of deed is Maximum and there is a rise in gross national crossing (Gross National Product). Due to a high level of economical activity, it causes a rise in prices and profits. There is an upswing in the skimp activity and economy reaches its Peak. This is in addition called as a bellowing Period. Recession Phase The turning point from prosperity to depression is termed as Recession Phase. During a recession period, the economic activities shadowy down. When demand starts falling, the overproduction and future investment plans are also assumption up. There is a steady exasperate in the output, income, employment, prices and profits. The businessmen lose confidence and become pessimistic (Negative). It reduces investment. The banks and the flowerpot tense to push greater liquidity, so credit also contracts. enlargement of business stops, stock market falls. Orders are turned and people start losing their jobs. The increase in unemployment causes a acuate decline in income and aggregate demand. Gen! erally, recession lasts for a get around period. embossment Phase When there is a continuous...If you want to get a full essay, order it on our website: OrderEssay.net

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