Ch:8 Trade Cycle Flashcards
Define trade cycle in the words of Prof Keynes?
A trade cycle is composed of periods of good trade characterized by rising prices, and low rate of unemployment, alternating with periods of bad trade characterised by falling prices and high rates of unemployment.
Define trade cycle in the words of Prof Hanson?
Trade cycle is fluctuation in employment, production and prices.
Define trade cycle in the words of Prof Haberler?
Business cycles are just the names of prosperity and adversity, good trade and bad trade.
Write the names of Phases of a trade cycle?
Ans: A trade cycle has the following four phases.
Depression or Slump.
Recovery or Revival.
Boom or Prosperity.
Recession or contraction.
Write the characteristics of the phase of depression of trade cycle?
In the phase of depression of trade cycle, level of prices, consumption, income, employment, wages, rate of interest and investment etc reach at the lowest ebb
Write the characteristics of the phase of boom of a trade cycle?
In the phase of boom of trade cycle national output, incomes of the people, wages, profits, prices, employment and living standard of the people etc all reach at the highest level
What is meant by multiplier?
Ans: Meaning of Multiplier: Multiplier is the number of times the income changes to a given amount of investment during a specific time period. For example, if the income rises to Rs 500/- with the investment of Rs 100/- The value of the multiplier will be 5.
What is meant by Accelerator?
Ans: Meaning of Accelerator: Accelerator is the numerical value of the relation between the change in income and the resulting change in investment. For example, if there is an increase of 100 rupees in consumption with the 100 rupees.
An increase in income and investment of 500 rupees is needed to meet additional consumption. Then accelerator will be 5.
Make a diagram of the phases of a trade cycle?
draw it loser
Write four Characteristics of trade cycles?
Following are four characteristics of trrade cycle:
1-Identical in duration:-
Boom or depression in all industries appears almost in the same period.
2-International in nature:-
All the trade cycles are of international nature.
3-Difference in the degree:-
There may be difference in the degree of phases of a trade cycle in different
sectors of the economy.
4-Regular Intervals: -
The phases of a trade cycle follow one another by regular intervals.
Q.11: Who did present the theory of sun-spot or climatic change?
Ans: The theory of sun-spot or climatic change was presented by Prof Jevons and Hensy L.Moor.
Who did present “Psychological theory” of trade cycles?
Ans: Psychological theory of trade cycle was presented by Prof Pigou and Bagehot.
Who did present “under consumption or over saving theory” of trade cycles?
Ans: Under consumption or “over saving theory” of trade cycles. was presented by Hobson, Foster , Catchings and Dughlas
Who did present “over investment theory” of trade cycles?
Ans: “Over investment theory” of trade cycles was presented by Hayek, Mises and Cassel belonging to Austrian school of thought.
Who did present “Monetary theory” of trade cycles?
Ans: “Monetary theory” of trade cycles was presented by Prof Hawtrey and Friedman.
