DEPARTMENT OF TECHNICAL

EDUCATION ANDHRA PRADESH

Name : R. Mohan
Designation : Head of CCP Section
Branch : DCCP
Institution : G.M.R Polytechnic, Gajwel,
Medak (Dist.)
Year/Semester : VI Semester
Subject : Business Economics-II
Subject Code : CCP-602
Topic : Trade Cycles
Duration : 50 minutes.
Sub-topic : Phases of Trade cycles-Depression
Teaching Aids : PPT, Animations
CCP 602.47 1
Objectives:

On completion of this period you will be able

to know :

 Phases of Trade cycle - Depression

CCP 602.47 2
Recap:

 We have learnt in the previous class

 Prosperity and Recession

CCP 602.47 3
Third stage of Trade Cycle

Depression - Contraction or downswing

 Most deplorable conditions prevail in the economy

“ real income consumed, real income produced

and the rate of employment fall or reach subnormal
level due to idle resources and plant capacity”

CCP 602.47 4
Features

 Decrease in outpput and trade transactions

 Increase in unemployment level
 Fall in income of the community
 Decrease in demand
 Fall in prices
 Decreased profit margin

CCP 602.47 5
 Contd.,

 Contraction of investment
 Decrease in demand for bank credit
 Decrease in rate of interest
 Business pessimism
 Idle plant capacity and the economic activity will
be at its lowest ebb

CCP 602.47 6
Summary

 Depression is a phase where the economic

activities contracts and the economy experiences
contraction of investment and unemployment of
workers

CCP 602.47 7
Quiz

1. During depression economy will be at its

______________
2. During depression there is business
________

Answer: 1. lowest ebb

2.pessimism

CCP 602.47 8
Frequently Asked Questions

2. Explain the Depression stage in the Trade cycle

CCP 602.47 9