4. Identify the key characteristics of each economic environment of the business cycle. You must include at least five key characteristics for each. You
may use your bullet points.
Boom Recession Trough Recovery
1. High confidence in the 1. Lower confidence of the 1. No confidence in businesses so 1. Production starts to increase
businesses they will be likely to businesses so they will be going they are going to do no
invest or expand more. to invest and expand less. investment or expansion.
2. Low unemployment, this means more 2. Low demand, therefore low prices 2. Unemployability raises, more 2. Employability starts to increase,
people are going to get employed. this means less people are going to people loss jobs. so less people are unemployed.
buy expensive and luxury items.
3. High demand and high prices this means 3. There is going to be a high 3. Close of businesses because they 3. Rise in demand and sales.
more people are going to buy expensive and unemployment therefore less people are going to be unable to make
luxury items. going to work but get benefits from profit.
the government.
4. The wages are going to increase 4.The government is going to 4. No taxes get paid, however the 4. Increase in business confidence so
so more income and disposable decrease the taxes. government still must pay benefits they start to invest and expand, and
income.
to people because they lost their this gives more job opportunities.
jobs.
5. The government will be likely to 5. Decrease the wages of the 5.The demand falls. 5.The business starts to make profit.
increase the taxes so that they customers.
will get more money to spend
on the public services.
5.For your selected organisation, compare how a boom impacts business activities and the effects of this. Answer the series of questions below.
may use your bullet points.
Boom Recession Trough Recovery
1. High confidence in the 1. Lower confidence of the 1. No confidence in businesses so 1. Production starts to increase
businesses they will be likely to businesses so they will be going they are going to do no
invest or expand more. to invest and expand less. investment or expansion.
2. Low unemployment, this means more 2. Low demand, therefore low prices 2. Unemployability raises, more 2. Employability starts to increase,
people are going to get employed. this means less people are going to people loss jobs. so less people are unemployed.
buy expensive and luxury items.
3. High demand and high prices this means 3. There is going to be a high 3. Close of businesses because they 3. Rise in demand and sales.
more people are going to buy expensive and unemployment therefore less people are going to be unable to make
luxury items. going to work but get benefits from profit.
the government.
4. The wages are going to increase 4.The government is going to 4. No taxes get paid, however the 4. Increase in business confidence so
so more income and disposable decrease the taxes. government still must pay benefits they start to invest and expand, and
income.
to people because they lost their this gives more job opportunities.
jobs.
5. The government will be likely to 5. Decrease the wages of the 5.The demand falls. 5.The business starts to make profit.
increase the taxes so that they customers.
will get more money to spend
on the public services.
5.For your selected organisation, compare how a boom impacts business activities and the effects of this. Answer the series of questions below.
