Expansion: The line of cycle that moves above the steady growth line represents the expansion phase of a business cycle. This style of demand forecasting works better with industrial buyers rather than retail. A boom is characterized by a period of rapid economic growth whereas a period of relatively stagnated economic growth is a recession. These phases of business cycles are shown in the following: 1. In this case, the firm generates an economic profit. It is called built- in- stabilizer to correct and thus restore economic stability. The Business cycles occur periodically in a regular fashion. A more subjective approach uses expert opinions to predict demand. Because each firm makes a unique product, it can charge a higher or lower price than its rivals. ..." in History if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions. This means the prosperity and depression will be occurring alternatively. First-degree price discrimination is an attempt by the seller to leave the price unannounced in advance and charge each customer the highest price they would be willing to pay for the purchase. Study for free with our range of university lectures! What Are the Characteristics of Each Stage of the Business Cycle?. Thus the next stage of the trade cycle, called recession of deflation starts. Find an answer to your question "Which of the following is a characteristic of this prosperity phase of the business cycle ..." in Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions. No plagiarism, guaranteed! Check all that apply. This is one of three short-run production alternatives facing a firm. This causes the depression to persist for a longer period than it would have lasted on its own. There are four main types of differentiation: Physical product differentiation, where firms use size, design, colour, shape, performance, and features to make their products different. Share Your PDF File Expansion of business stops, stock market falls. Sales performance of other goods with similar product attributes may serve as proxies for a current product with no track record. Although prices remain more or less stable, wages and other incomes show a noticeable rise. The Great Depression of 1929 is an example of this. The business cycle starts from a trough (lower point) and passes through a recovery phase followed by a period of expansion (upper turning point) and prosperity. Ask your question. A. by increasing unemployment benefits. 4. Production schedules by firms are curtailed, workers are laid off and outstanding orders for raw materials are cancelled. However, the fall in wages is less than the fall in prices. Though the general structure of different cycles may be the same, it may not be perfectly rhythmical in character. Though the name implies that this phenomenon applies to a specific industry or organization, the business cycle is actually a repetition of four periods that occurs in the general economy. The economy is growing again. Qualitative forecasting is based on the consensus view of your panel as you digest and aggregate their opinions. The time period to complete this sequence is called the length of the business cycle. Which of the following is a characteristic of the prosperity phase of the business cycle? Due to the fact that monopolies make lot of profits, it can be used for research and development and to maintain their status as a monopoly. Phenomenal changes in employment, output and price level will be normally accompanied by changes in currency, credit and velocity of circulation of money in the same direction. Generally, prices and production fall or rise together. Low income people will pay more and high income people will pay less. Who is going to be the next president? Profits and wages fall faster relatively to rent and other fixed incomes. In a monopoly market, the seller faces no competition, as he is the sole seller of goods with no close substitute.In a monopoly market, factors like government license, ownership of resources, copyright and patent and high starting cost make an entity a single seller of goods. But there need not be uniformity in the extent and magnitude. If Business Which event best describes why it is difficult to sell a home during a recession? Direct tax structure can be divided into three bases-. Recovery shows the upturn of the output and employment of the economy from the state of depression. Prices decline because of the expectations of producers in general that these would continue to fall in spite of all governmental efforts. When there is depression, the income decreases and many people fall in the no-income-tax bracket and the tax revenue decreases. Ask your question. ★★★ Correct answer to the question: Which of the following is a characteristic of the prosperity phase of the business cycle? As unemployment increases, the wages tend to fall under its pressure. Differentiation through distribution, including distribution via mail order or through internet shopping, such as Amazon.com, which differentiates itself from traditional bookstores by selling online. During a recession, what is one way governments try to encourage growth? B. Boom or Prosperity: During the recovery phase, rise in output and incomes of the people induces substantial increase in aggregate spending. All work is written to order. Need for price discrimination: increase output and profit. However, they cannot fully appreciate the restaurant or the meal until after they have dined. This movement will persist till the forces accumulate to alter the direction and create the downward movement. The other two are profit maximization (if price exceeds average total cost) and loss minimization (if price is greater than average variable cost but less than average total cost). 2. 1. depression. The business world goes panicky. A-- It describes government measures to stimulate demand and bring about a recovery. The graphs show the US unemployment rate and the price of whole milk between 2006 and 2012. Our mission is to provide an online platform to help students to discuss anything and everything about Economics. The upward movement and downward movement are cumulative in their process. Free resources to assist you with your university studies!
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