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What are some characteristics of recession phase of business cycle?
-less consumer spending therefore,
-less profit for businesses
-less demand for products
-less consumer spending therefore,
-less profit for businesses
-less demand for products
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my need to note on characteristics of business. Charactaristics of business: 1) Entreprenure 2 deals in goods and services 3 involve production or exchange of goods …4 series of deals 5 desire to earn profit 6 involves element of risks 7 creation of utilities etc. Characteristics of Business? According to L.H. Haney, "Business may be defined as human activities directed towards providing or acquiring wealth through buying and selling goods". This definition includes activities relating to the production of goods. A vital omission is 'services'. Business includes rendering of services also. The main characteristics of business are; 1. Entrepreneur:- There must be someone to take initiate for establishing a business. The person who recognises the need for a product or service is known as entrepreneur. The entrepreneur is a key figure in the process of economic growth. The quality of entrepreneurship exiting in any region determines to a large growth. The quality of entrepreneurship existing in any region determines to a large extent the development of that region. The entrepreneur visualizes a business, combines various factors of production and puts them into a going concern. 2. Economic Activities:- A Business includes only economic activities. All those activities relating to the production and distribution of goods and services are called economic activities. These activities are under-taken with economic motive. Business is carried on with a profit motive. Any activity undertaken without economic consideration will not be a part business. So, business covers only economic activities. 3. Exchange of Goods and Services: A business must involve exchange of goods and services. The goods to be exchanged my either be produced or procured from other sources. The exchange of goods and services is undertaken with profit motive. Production or purchasing of goods and services for personal consumption do not constitute business. The purchase of goods by a retailer constitutes business while the purchase of goods by a consumer is not business. The purchase of goods should be to sell them again. The same principle is applicable to services. If a person cooks his food at home it is not business, but if the same person cook at a restaurant, it is business, because he exchange his services for money. 4. Profit Motive:- The profit motive is an important element of business. Any activity undertaken without profit motive is not business. A businessman tries to earn more and more profits out of his business activities. The incentive for earning profits keeps a person in business and is also necessary for the continuity of the business. This does not mean that there will not be losses in business. The object of starting a business is to earn profit through there may be losses. The profit motive does not entitle a businessman to start exploiting the consumers. The responsibility of business towards society restricts a businessman from earning exorbitant profit. The business activity will flourish more when the business serves the society. 5. Risk and Uncertainty:- The business involves larger element of risk and uncertainty. In fact a business tries to foresee any future uncertainties and plan his business activities accordingly. The factors on which business depends are never certain, so the business opportunities will also be uncertain. These may be shift in demand, strike by employees, floods, war, fall in prices, fluctuations in money market etc. If a businessman is able to foresee uncertainties and is able to bear them then he will successful, otherwise he may be forced out of business. The risk element in business keeps a person vigilant and he tries to ward off his risk by executing his policies properly. 6. Continuity of Transactions:- In business, only those transactions are included which have regularity and continuity. An isolated transaction will not be called business, even if the person earns from that deal. A person builds a house for himself, but later on sells it on profit. We will not sell them, this will be called business. So the transactions should have continuity and regularity, otherwise they will not be a part of business. 7. Creation of Utility:- The goods are provided to the consumers s per their linkings and requirements. Business crates various types of utilities ion goods so that consumers may use them. The utility may be form utility, place utility, time utility etc. When raw materials are converted into finished goods, it creates from utility. The goods are transported from the places of production to the ultimate consumers; it creates place utility. In the present industrial world, production is not done only for the present but it is undertaken for the future also. The process of storing goods when they are not required and supplying them at a time when they are needed is called creation of time utility. So the business creates many utilities in goods so that the consumers may use them according to their preferences and needs. 8. Organisation:- Every enterprise need an organisation for its successful working. Various business activities are divided into departments, sections, and jobs. An organisation creates the framework for managerial performance and helps in coordinating various business activities. A proper oganisation is helpful in the smooth running of the business and helps to achieve its objectives. 9. Financing:- Business enterprises cannot move a step without finance. The finances are required for providing fixed and working capital. The availability of other factors of production also depends upon the availability of finances. After estimating its financial requirements, the businessman tries to find out the sources from which these requirements will be met. A proper capital structure is must for the success of the business. 10. Consumer Satisfaction:- The utilities of business is to supply goods to the consumers. The foods are produced for the consumers. If the consumer is satisfied, then he will purchase the same thing again, otherwise he will for in for an alternative commodity. The business should try to satisfy the consumer so that the demand for his products is maintained. The existence and expansion of business depends upon the liking of the consumers for the products of that business. The businessman should try to produce goods according to the linkings and tastes of consumers. The commodities should be made available when they are needed. Business and consumers exist for each other. 11. Satisfying Social Need:- The business should aim at serving the society at large. The business is a socio-economic institution. It must look to the public good. A great emphasis is laid, now-a-days, on the social aspect of business and social obligations of business. It is not only the public which needs business but business also needs public support. S business must serve public purpose. pradeepkalari (pradeep sp)
According to Muhammad Farooq Arby from State Bank of Pakistan, Pakistan has completed two business cycles since independence. First from 1949 to 1969. Second from 1969 to 1991…. The third cycle has started in 1991. His research measures a business cycle starting from a peak, which should suggest that a third cycle expectedly should end in year 2004-5. He has analyzed data till 2001, further analysis needs to be done on real GDP for years beyond. I believe Pakistan in year 2010 should be in the fourth business cycle
Boom and depression.
- fast food - local groceries/bakeries - take-aways - home deliveries
Find a business that meets the need of the market to save money, feel better or retain their social standing. Large makeup companies were started in the depression, so busines…ses that are beauty based will thrive in a recession. Credit counseling, credit repair and temp agencies thrive during budget cutting times. The fundamental rules for starting any business still applies during a recession. The challenge is always the same: meet a market need, which is often impacted ans shaped by a recessionary economy.
-real GDP goes up -will eventually reach a peak -prices going up -supply and demand go up
depression recovery boom recession Final phase
a genetic character that results from the expression of the two recessive alleles.
Employment is at its peak.prices are very high.purchasing power is also very high.Aggregate demand in the economy is also very high.Output which is production is also at its p…eak.Consumption of consumer goods as well as capital goods is at its top.
They were national or international in scope; they affected output, employment, retail sales, construction, and other macroeconomic variables; and they lasted for years, with …upward movement longer than downward movement.
Similarly, a period of recession occurs at the start of the contraction phase.
The expansion phase of the business cycle starts with a short period of recovery before becoming a full-blown expansion.
Discuss the boom and recession phases of a business cycle? Give a global example for each phase to support both theories.
. What are some of the characteristics of a firm with a long cash cycle?
The most noticeable changes will be that organisations/companies will look to reduce their overhead costs to remain competitive and to respond to falling demand for their good…s or services. This usually means reductions in employee numbers, changes to working patterns as short time or part time working is introduced. Spending on recruitment and training will follow although this is probably the worst possible time to cut spending on training which is one of the most effective ways of gaining a competitive edge in a recession. Those with the best trained and prepared workforce will not only survive the recession but more importantly be equipped to survive and prosper in the recovery phase. Companies also look to reduce their debt levels and reduce capital spending. The recessionary phase is one of great opportunity however as firms are looking at every aspect of their business and will be open to tenders from new suppliers as they seek to reduce costs and a positive outlook and approach here can win new business.