Though the phases don’t occur at regular intervals, they have some recognizable indicators. The business cycle The business cycle diagram. Interpretations of the cycle Expansion is between the trough and the peak. That 's when the economy is growing. Gross domestic product, which measures economic output, is increasing.
In some cases, it could be defined as falling prices and substantial unemployment. Also, according to Van Der Merwe and Mollentze (2010:19) said Deflation is the opposite of inflation. Deflation is therefore a continuous decline in the general price level of the economy. 2. Reflation Reflation means normalising prices that have previously fallen.
in the economy there are many methods that are used by economists to measure how fast the economy is growing the most common one is the REAL GDP(GROSS DOMESTIC PRODUCTS).GDP can be measured into three different ways of which are • Quarterly growth at annual rate • The fourth quarter or year over year growth rate • The annual average growth rate Formula GDP1 – GDP2 Economic growth = GDP1 CURRENT MEASUREMENTS/LEVELS • REAL GDP is the current measurement 2. Full employment -the government aims to reduce the unemployment rate to a very low unemployment rate or no unemployment at
INTRODUCTION Inflation is defined as the percentage rate of increase in the general price level. Inflation is a macroeconomic issue faced by all economies including underdeveloped, developing and developed countries. Inflation can be further expressed as firms increasing markup on imported raw materials, labor cost in order to maximize their profits. Inflation can be either predictable or unpredictable. Predictable inflation occurs when policy makers are able to predict an increase in the price level of goods and services whereas unpredictable inflation is when consumers are surprise with the rise in the price of goods and services.
The average income of a conventional American family had decreased by 40% from 1929 to 1932. In addition the GDP had decreased by more than 25%. The pivotal cause of The Great Depression was the decline in spending that led to a decline in production. Nevertheless there were many other reasons that contributed such as the stock market crash where consumer purchases of resilient goods and business investment fell sharply after the crash. The most likely explanation is owing to the uncertainty of future incomes generated by the financial crisis.
The purpose of this article is to study the crashes of housing market, emerging market, poor banking sector and of course recession. Findings of the study shows that growth and expending domestic demand may increase import demand and it will cause growing economics. A cross sectional data was used. Hassan B. Ghassan et al (2013) used time-series data from 1986 to 2010. According to this study the absence of cointegration between international liquitidy net export and GDP are the cause of financial crises and its impact on Saudi Arabia’s economy specially on oil production.
On the other way due to high wages and salaries there is an increment in income and it reason in inflation. d) Increase in Prices of Imports when increase in price of import that leads to beginning of inflation. If there is an increase in the prices of oil and other imported raw material then it will reason to decrease in supply. e) Devaluation The worth of our currency is diminished due to devaluation. That makes imported goods more costly and it leads to insufficiency of
Inflation is a rate at which general price level increases for goods and services produced in a nation. When inflation exists, the purchasing power of a nations currency declines over time. Inflation not only reduces the level of business investment, but also the efficiency with which productive factors are put to use. The benefits of lowering inflation are great, according to the author Dornbusch, but also dependents on the rate of
According to the economists South Africa is facing stagflation. Stagflation occurs when prices of good increases while unemployment increases and spending decrease. South Africa is facing stagflation because goods and services are expensive while most of people are unemployed, which decrease spending power. 12. There are possible solutions to reduce unemployment in South Africa.
Unemployment has great importance between the macroeconomic problems..Unemployment is one of the major variables that depicts the health of an economy.A higher unemployment means that people can not get according to their wants and skills.The task of Growth is to share profit in the national income. They show a positive relationship between higher rates of profit and higher rates of growth. Higher growth is achieved through profits effective on the rate of investment. Economic growth and unemployment are inversely related along the business cycle in the short run.Unemployment is affected by the long term growth change.Because of this fact European unemployment raise in the 1970s and 1980s . The decline in the rate of economic growth raises the issue of unemployment.