Economic cycles

Question 1

What is THE economic cycle

Answer 1

-The economic change between periods of expansion (growth) and contracture (recession)

Question 2

What factors are used to calculate the economic cycle

Answer 2

-Interest rates
-Total employment
-Gross domestic product
-Consumer spending

Question 3

Why would businesses and investors need to understand the economic periods

Answer 3

-To determine when to invest and when to pull their money out

Question 4

What is impacted by economic cycles

Answer 4

-Stocks and bonds
-Profits
-Corporate earnings

Question 5

What is AN economic cycle

Answer 5

-The overall status of the economy as it goes through four stages in a cyclical pattern

Question 6

Why do businesses and investors need to manage their strategies over economic cycles

Answer 6

-Not control them but rather to survive and profit from them

Question 7

Who manages courses and the effects of an economic cycle

Answer 7

-Governments
-Financial institutions
-Investments

Question 8

What do investors find opportunities in during expansions

Answer 8

-Technology
-Capital goods
-Energy sectors

Question 9

What do investors find opportunities in during contractions

Answer 9

-Utilities
-Consumer staples
-Healthcare

Question 10

Why do businesses track the relationships between their performance and business cycles

Answer 10

-To plan strategies to protect themselves from approaching a downturn
-To put themselves in a position to maximize their advantage of economic expansions