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4PhasesofBusinessCycleinEconomicswithDiagram

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BusinessCycle

4PhasesofBusinessCyclein
EconomicswithDiagram
Post:GauravAkrani.
Date:6/18/201101:47:00AMIST.
Comments(2)
Label:Economics.

PhasesDefinition

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BusinessCycle(orTradeCycle)isdividedintothefollowingfourphases:

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1.ProsperityPhase:ExpansionorBoomorUpswingofeconomy.
2.RecessionPhase:fromprosperitytorecession(upperturningpoint).
3.DepressionPhase:ContractionorDownswingofeconomy.
4.RecoveryPhase:fromdepressiontoprosperity(lowerturningPoint).

StagesinEvolutionofBusiness
fromLocaltoGlobal

PartsDiagram
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DiagramofFourPhasesofBusinessCycle
Thefourphasesofbusinesscyclesareshowninthefollowingdiagram:

IndianMoneyMarketFeatures,
DrawbacksandRecentReforms

ConceptofMarketingResearch
(MR)MarketingResearchProcess

MANAGEMENT
ManagementFunctionsAnd
Process,ManagementThought
PlanningFirstPrimaryImportant
FunctionOfManagement
ManagementByObjectives
(MBO)PeterDruckerMBO
DecisionMakingProcessIn
ManagementProblemSolving
Authority,Responsibilityand

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4PhasesofBusinessCycleinEconomicswithDiagram
AccountabilityInManagement
PrincipleofDelegationof
AuthorityImportanceofDelegation
OrganisationOrganizational
StructureOrganisationalChart
DecentralisationAdvantages
andLimitationsofDecentralization
ManagerialLeadershipLeader
QualitiesLeadershipTheories
HumanResourceManagement
HumanResourceDevelopment
MotivationMotivationalFactors
IncentivesTheoriesofMotivation
Maslow'sHierarchyofNeeds
TheTheoryofHumanMotivation

The business cycle starts from a trough (lower point) and passes through a
recoveryphasefollowedbyaperiodofexpansion(upperturningpoint)and

FrederickHerzberg'sTwoFactor
TheoryMotivationHygiene
Factors

prosperity. After the peak point is reached there is a declining phase of

recession followed by a depression. Again the business cycle continues
similarlywithupsanddowns.

DouglasMcGregor'sTheoryX
andTheoryYEmployee
Motivation

ExplanationofFourPhasesofBusinessCycle

DavidMcClelland'sAchievement
Motivation,ManifestNeedTheory

Thefourphasesofabusinesscyclearebrieflyexplainedasfollows:

MarketingMixand4P'sofThe
MarketingManagementArticle

1.ProsperityPhase

WhatisMarketSegmentation?
ImportanceInModernMarketing

Whenthereisanexpansionofoutput,income,employment,pricesandprofits,
thereisalsoariseinthestandardofliving.ThisperiodistermedasProsperity
phase.

QualityControlTotalQuality
ManagementTQMQualityCircles

Thefeaturesofprosperityare:
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1.Highlevelofoutputandtrade.
2.Highlevelofeffectivedemand.
3.Highlevelofincomeandemployment.

TheEconomics
EconomicsGrowth
Economy

4.Risinginterestrates.
5.Inflation.
6.Largeexpansionofbankcredit.
7.Overallbusinessoptimism.
8.AhighlevelofMEC(Marginalefficiencyofcapital)andinvestment.

CATEGORY
AdministrativeLaw
Advertising
Banking

Duetofullemploymentofresources,thelevelofproductionisMaximumand
there is a rise in GNP (Gross National Product). Due to a high level of

Blogger

economicactivity,itcausesariseinpricesandprofits.Thereisanupswingin

BusinessDevelopment

theeconomicactivityandeconomyreachesitsPeak.Thisisalsocalledasa

CommunicationSkills

BoomPeriod.

2.RecessionPhase
The turning point from prosperity to depression is termed as Recession
Phase.
Duringarecessionperiod,theeconomicactivitiesslowdown.Whendemand
starts falling, the overproduction and future investment plans are also given
up.Thereisasteadydeclineintheoutput,income,employment,pricesand
profits.Thebusinessmenloseconfidenceandbecomepessimistic(Negative).

DistinguishBetween
Economics
Education
Finance
IndustrialPsychology
KalyanCity
Management
MarketingResearch

Itreducesinvestment.Thebanksandthepeopletrytogetgreaterliquidity,so

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creditalsocontracts.Expansionofbusinessstops,stockmarketfalls.Orders

ProductionPlanning

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5M'sofAdvertisingFeaturesof
TheAdvertisingManagement

BANKING

WhatisaBank?Introduction,
DefinitionandFeaturesofBank
DifferentTypesofBanksWhat
areVariousKindsofBanks?
CommercialBanksDefinitions,
PrimarySecondaryFunctions
BalanceSheetofCommercial
BankLiabilitiesandAssets
HowtoOpenBankAccount?7
StepsToOpenBankAccount
WhataretheAdvantagesof
OpeningBankAccount?
SavingAccountBankMeaning,
FeaturesandAdvantagesofIt
FixedDepositAccountofBank
Meaning,Features,Advantages
WhatisCurrentBankAccount?
ItsFeaturesandAdvantages
RecurringDepositAccountIn
BankMeaningandFeatures
WhatisaCheque?Definition
KindsandTypesofCheques
WhatareFeaturesofCheques?
MainCharacteristicsofChecks

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Snakes

are cancelled and people start losing their jobs. The increase in
unemployment causes a sharp decline in income and aggregate demand.
Generally,recessionlastsforashortperiod.

FINANCE
3.DepressionPhase
Whenthereisacontinuousdecreaseofoutput,income,employment,prices
andprofits,thereisafallinthestandardoflivinganddepressionsetsin.

WhatisFinance?Meaning
DefinitionFeaturesofFinance
WhatisFinancialPlanning?
MeaningTypesofFinancialPlans

Thefeaturesofdepressionare:

WhatisFinancialManagement?
MeaningDefinitionScopeArticles

1.Fallinvolumeofoutputandtrade.

WhatisCorporateFinance?
MeaningWhatitIncludes?

2.Fallinincomeandriseinunemployment.
3.Declineinconsumptionanddemand.

WhatisCreditRating?Meaning
andArticlesonCreditRating

4.Fallininterestrate.
5.Deflation.

WhatisCrossingofCheque?
DifferentTypesofCheckCrossing
AutomatedTellerMachine(ATM)
TheAdvantagesofATMMachine
EBankingOnlineBanking
MainAdvantagesofEBanking
PrinciplesofGoodLending
EveryBankerFollowsLoans
DifferentFormsofAdvancesby
CommercialBanksLoanTypes
DutiesandResponsibilitiesof
ComputerOperatorinBank
NationalisationofBanksinIndia
IntroductionObjectivesDemerits
NarasimhamCommitteeReportI
1991II1998Recommendations
NewEconomicReformsofthe
BankingSectorInIndiaBrief

6.Contractionofbankcredit.
7.Overallbusinesspessimism.
8.FallinMEC(Marginalefficiencyofcapital)andinvestment.

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FunctionsofReserveBankof
India(RBI)CreditPolicyofRBI

In depression, there is underutilization of resources and fall in GNP (Gross

NationalProduct).Theaggregateeconomicactivityisatthelowest,causinga
declineinpricesandprofitsuntiltheeconomyreachesitsTrough(lowpoint).

4.RecoveryPhase
The turning point from depression to expansion is termed as Recovery or
RevivalPhase.
During the period of revival or recovery, there are expansions and rise in
economicactivities.Whendemandstartsrising,productionincreasesandthis
causes an increase in investment. There is a steady rise in output, income,
employment, prices and profits. The businessmen gain confidence and
become optimistic (Positive). This increases investments. The stimulation of
investment brings about the revival or recovery of the economy. The banks
expand credit, business expansion takes place and stock markets are
activated. There is an increase in employment, production, income and
aggregate demand, prices and profits start rising, and business expands.
Revivalslowlyemergesintoprosperity,andthebusinesscycleisrepeated.
Thus we see that, during the expansionary or prosperity phase, there is
inflationandduringthecontractionordepressionphase,thereisadeflation.

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2Comments:
Anonymoussaid...
October26,2013at3:22PM

Wellillustratedandpreciseforaneconomistlikeme

Anonymoussaid...
July17,2014at4:50PM

Yourarticlesarealwaysverygoodandtothepoint...Ialwayspreferyour
notes..

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