The business or trade cycle relates to the volatility of economic growth, and the different periods the economy goes through (e.g. boom and bust). There are many different factors that cause the economic cycle – such as interest rates, confidence, the credit cycle and the multiplier effect. Some economists also point to supply side explanations, …
Summary Real business cycle models state that macroeconomic fluctuations in the economy can be largely explained by technological shocks and changes in productivity. These changes in technological growth affect the decisions of firms on investment and workers (labour supply). Hence changes in output can be traced to microeconomic and supply-side factors. Real business cycle models …
Definition of The Business cycle – The Business cycle refers to the cyclical nature of economic growth. Typically the business cycles involves a period of rapid growth followed by slower growth or in some cases a recession. The business cycle is sometimes referred to as the ‘trade cycle’ or just economic cycle. Some business cycles …
Definition: The product life-cycle (PLC) refers to the different stages a product goes through from introduction to withdrawal. The product life-cycle refers to a likely pathway a product may take. It has implications for the marketing strategy of a firm as it seeks to introduce, grow and maintain market share. In this case, the product …
Freemium is a business model where a firm gives away its product for free with the aim of later converting some users to the paid version. Freemium is different to a trial offer because the user can continue to use the free version for a prolonged period. Freemium is like an indefinite free trial.Dropbox is …
The interest rate cycle is closely related to the economic or trade cycle. In theory, movements in interest rates should mirror the economic cycle. If the economy is growing strongly and inflationary pressures increasing – Central Banks will increase interest rates to slow down the economy and prevent inflation. If the economy enters into recession …
The economic trade cycle shows how economic growth can fluctuate within different phases, for example: Boom (A period of high economic growth usually causing inflation) Peak (top of the trade cycle, where growth rates may start to fall) Economic downturn/recession (where the growth rate falls and may become negative – leading to a fall in national output) …
Boom and bust economic cycles involve: Rapid economic growth and inflation (a boom), followed by: A period of economic contraction / recession (falling GDP, rising unemployment) Causes of boom and bust cycles 1. Loose Monetary Policy If monetary policy is too loose, it means real interest rates are too low given the state of the …