Economic Cycle
Boom:
Output is high and economy is growing
Consumer spending is high
Consumers are willing to borrow
Strong growth in demand, demand pull inflation
House prices rise
Low unemployment
Wages raise as a result
Businesses working at full capacity, imports could increase
Increased business investment
Downturn:
Rate of growth falls
Unemployment rises
Wage growth slows
Businesses find it hard to push price increases
Inflation falls
Fall in sales/demand
Profit growth slows
Imports decrease
Boom:
Output is high and economy is growing
Consumer spending is high
Consumers are willing to borrow
Strong growth in demand, demand pull inflation
House prices rise
Low unemployment
Wages raise as a result
Businesses working at full capacity, imports could increase
Increased business investment
Downturn:
Rate of growth falls
Unemployment rises
Wage growth slows
Businesses find it hard to push price increases
Inflation falls
Fall in sales/demand
Profit growth slows
Imports decrease
