Economic change Flashcards
What is GDP
gross domestic product. Measure of a country’s total output of goods over a period of time
What are the 4 stages of GDP growth cycle?
boom
recession
slump
recovery
What is a Boom?
high rate of economic growth and production
What are features of a boom? (pro/con)
high profit
low unemployment
high inflation
shortages in supply
What strategic decisions will a business make during a boom
Expand into new markets via market development
Employ more
Reduce costs for economies of scale
What is a recession
Fall in output and growth
What are features of a recession? (pro/con)
Demand decline
Production decline
Decision of business during recessions?
Implement market penetration strategies
Stockpile products
Cut costs
What is a slump
prolonged economic decline
What are features of a slump (pro/con)
High unemployment
High closure of businesses
Low interest rates
Low spending/investment levels
Decisions during a slump
Redundancies
Scale down production
Reduce capacity
Reduce prices
Reduce range (to most profitable ones)
Leave markets
What is Recovery
Economy starts to pick up after decline
features of recovery
recruitment increase
uses more capacity
increase spending
