ILO:
a) Understanding of the trade (business) cycle
b) Characteristics of a boom
c) Characteristics of a recession
a) Understanding of the trade (business) cycle
b) Characteristics of a boom
c) Characteristics of a recession
Trade (business) cycle
The trade or business cycle describes how the economy tends to exhibit recurring trends in economic growth rates.
Booms tend to be followed by economic slumps or slowdowns, which tend to be followed by recession, before the economy moves into the recovery phase, and then back into a boom.
Booms tend to be followed by economic slumps or slowdowns, which tend to be followed by recession, before the economy moves into the recovery phase, and then back into a boom.
Cause of a trade cycle
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Explain why economic growth is not consistently positive. (5 marks)
Stock Market Crash of 2008
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Explain why economies recover after a recession.
(5 marks)
Franklin Delano Roosevelt's (FDR's) New Deal Explained in One Minute
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Characteristics of a boom
Examine 2 characteristics of an economic boom. (8 marks)
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90's Britain - Creativity and Change
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Additional information:
UK economic data
UK economic data
Possible answers:
• high rates of economic growth
• low rates of unemployment (low levels of spare capacity or perhaps even a positive output gap)
• demand-pull inflationary pressures
• high consumer and business confidence
• improving government budget balance (as tax revenue rises, and government expenditure on benefits falls).
• high rates of economic growth
• low rates of unemployment (low levels of spare capacity or perhaps even a positive output gap)
• demand-pull inflationary pressures
• high consumer and business confidence
• improving government budget balance (as tax revenue rises, and government expenditure on benefits falls).
Characteristics of a recession (6 or more months -ve GDP)
Assess the risks of the recession created by covid for the UK economy. (10 marks)
Coronavirus: What is a recession? - BBC News
Possible answers:
• negative rates of economic growth
• high rates of unemployment – particularly demand-deficient unemployment (high levels of spare capacity and a large negative output gap)
• low rate of inflation
• low business and consumer confidence
• a worsening government budget balance.
• negative rates of economic growth
• high rates of unemployment – particularly demand-deficient unemployment (high levels of spare capacity and a large negative output gap)
• low rate of inflation
• low business and consumer confidence
• a worsening government budget balance.
Keynes and economic policy in a recession
Assess the need for Government spending during a recession. (10 marks)
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Covid-19: how to fix the economy | The Economist
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Keynesian Economics (Revision Webinar Video)
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Revision videos
Consolidate your learning with the videos below:
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Y1 6) The Economic Cycle (Business Cycle) - Stages, Characteristics and Causes
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Essential Hayek: Economic Booms and Busts
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