NAMA : YULIANRY ANDESTA

NIM : 042429646

MATA KULIAH : BAHASA INGGRIS NIAGA / AKBI4201

TUGAS :1

TUGAS 1

A. Understanding Business Cycle really helps business people to operate his

business.
agree
Explanation:
The business cycle is also known as the economic cycle or trade cycle.
In simple terms, the business cycle can be interpreted as a series of economic
conditions that occur repeatedly, constantly, and regularly in a certain period.
Even though it is repeated, the length of the business cycle cannot be predicted
or determined with certainty. The variable used as a measure of the business
cycle is the growth rate of Gross Domestic Product.

WHAT IS A BUSINESS CYCLE

The business cycle is also known as the economic cycle or trade cycle. In
simple terms, the business cycle can be interpreted as a series of economic
conditions that occur repeatedly, constantly, and regularly in a certain period.
Although repetitive, the length of the business cycle cannot be predicted or
determined with certainty. The variable used as a measure of the business cycle
is the real Gross Domestic Product (GDP) growth rate. Economic fluctuations in
each country occur between periods of expansion and contraction. Changes in
economic conditions are caused by the level of employment, productivity, and
demand for the supply of goods and services in a country. In the short term,
these changes have less of a positive impact on economic growth, as they cause
the country's economy to enter a period of expansion and recession. However, in
the long term, a fluctuating economy can trigger economic growth, because the
authorities of a country can have the opportunity to increase its potential output
from time to time. Stages in the business cycle
A. PROSPERITY
This stage of prosperity represents the peak of the cycle, where the
economy of a country is in good shape. The rate of economic growth is
high and the unemployment rate is low. At this stage, people's purchasing
power increases along with the increase in people's income. In this
regard, at this stage consumers generally want to use the money they
have to get the highest level of satisfaction with goods and services. As a
cycle progresses, at the prosperity stage or the peak of this cycle at the
same time it becomes a turning point where the increase in output
gradually stops and begins to decline.
B. DETERMINATION
From the stage of prosperity or the peak of the cycle, economic
conditions move into a stage of decline marked by an economic recession.
The economy of a country is said to be in a recession stage if the value of
GDP has decreased or the value of real economic growth has been
negative for two or more quarters in a period of one year. Generally,
economic recessions occur due to an excess supply of goods, but they are
not matched by an increase in consumption, where consumption actually
decreases. Apart from that, an economic recession can also be caused by a
lack of innovation.
C. RECOVERY
At the recovery stage, the economy can again be felt. Gradually but
surely, the level of public demand for goods and services began to rise.
This of course triggers producers to increase production volume. As the
volume of production increased, the unemployment rate began to be
overcome. Recovery represents expansion, that is, when economic
growth begins to pick up following contraction and troughs in the
business cycle. Economic conditions are said to be entering the recovery
stage when real GDP returns to its long-term potential level. At this stage
of recovery, the economy moves from depression and recession to
prosperity where economic growth begins to creep up and stabilize.
This economic movement will continue until it reaches the peak of the
cycle again (the prosperity stage). In the history of the world economy,
the business cycle that occurs is between 3 and 5 years in one cycle stage.
During the period of the business cycle, the duration of an economic
recession is around 11 months. The formulation and implementation of
appropriate monetary and fiscal policies can shorten the period of
economic recession and accelerate the stage of economic recovery.
Though the name implies that this phenomenon applies to a specific
industry or organization, the business cycle is actually a repetition of
four periods that occurs in the general economy. Each of these four
periods consists of a number of traits specific to that period, though the
traits of each period may help trigger the next portion of the cycle.

Expansion
The expansion period, also commonly known as the growth period,
occurs as the economy grows and more members of society share in
prosperity. During the expansion period, an increase in consumer
demand spurs employers to hire more workers as they ramp up
production. The newly employed workers add to demand as they
become able to buy more goods of their own, and the process continues.
Signature characteristics of the expansion period also include increased
business activity, higher consumer confidence and, less positively,
inflation. The longest expansion period in U.S. history, according to the
website Quick MBA, occurred between March 1991 and March 2001.

Peak
After a sustained expansion period, the economy tends to peak, with
operations at or near capacity. In the peak period, business leaders
typically see demand plateau, and hiring may level off as managers
begin to meet demand with existing resources. During this period,
sometimes also known as a period of prosperity, workers commonly
ask for raises to absorb the effects of inflation. Even without increased
business spending or the addition of new positions, these raises push
the cost of goods higher, and inflation typically continues. Businesses
may begin identifying efficiencies that allow them to reduce headcount
to boost profits without raising prices.

Contraction
After identifying efficiencies and synergies during a peak period,
businesses tend to lay off workers as the economy enters a period of
contraction. During this period, the economy typically sees layoffs and
downsizing, and the unemployment rate may climb. The laid-off
workers have less money to spend, so consumer demand falls;
businesses with lower demand may attempt to maintain profits by
laying off even more workers, accelerating the contraction. With fewer
workers and lower demand for goods and services, businesses also tend
to cut spending and put other cost-saving measures in place during this
period of the business cycle. The longest economic contraction in the
U.S. took place between October 1873 and March 1879, according to
Quick MBA.

Recession
As layoffs and corporate downsizing plateau, the economy finds a new
balance during a period of recession; some economists also call this
period a trough. At the low point of the business cycle, layoffs and
downsizing activities slow or end, and unemployment peaks. Very high
unemployment equates to very low demand, and the overall gross
domestic product, or GDP, shrinks. Business leaders tend to be less
focused on efficiencies during troughs, turning their attention to
developing new revenue streams. These new endeavors set the stage
for the expansion cycle.
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