506645
Description
Mind Map by 07nelvjose, updated more than 1 year ago
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Created by 07nelvjose
over 10 years ago
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Economic
Cycle
- Boom
- Occurs when real national output is
rising at a faster rate than the trend rate of
growth
- Growing consumption
- Rising real income
- Strong confidence
- Increased investment
- Low unemployment
- Rising wages
- Rising wages
- Increased investment
- High demand for imports
- Larger trade deficit
- Larger trade deficit
- Rising tax revenue
- Government spending increased
- Inflationary pressure
- Surge in house prices
- Rising real income
- Occurs when real national output is
rising at a faster rate than the trend rate of
growth
- Recession
- Fall in level of national output for two consecutive
quaters
- Significant decline in the economic activity
- Rising unemployment
- Decline in consumer and business confidence
- Contraction in consumer spending
- Rise in saving
- Contraction in consumer spending
- Drop in the value of exports and imports
- Growing budget deficit
- Declining tax revenue
- Declining tax revenue
- 2009 recession in UK
- Collapse of property boom
- Prices rising more quicker than wages rises
- Less disposable income
- High income elasticity of demand(Luxury
items)
- High income elasticity of demand(Luxury
items)
- Less disposable income
- Rising unemployment
- Exports declined
- Major trading partners affected by
recession
- Negative multiplier
- Major trading partners affected by
recession
- Collapse of property boom
- Negative income elasticity(inferior goods) rise
- Fall in level of national output for two consecutive
quaters
- Recovery
- Occurs when real national output picks up
from slump
- Needs strong confidence in consumer and
business
- Cuts in interest rates
- Rise in government borrowing
- Increased budget deficit
- Increased budget deficit
- Occurs when real national output picks up
from slump
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