So, hari ini rasa macam nk tulis sth psl ekonomi..
Even though apa yang aku tulis ni, kamu semua mungkin ada yang dah tahu..tapi aku menulis untuk memberitahu kepada orang yang belum tahu lagi..bukan semua orang belajar ekonomi kan?
My sister pernah cakap, dia tak pernah faham kenapa ada recession, economic growth semua..
So, hari ini aku nak explain business cycle dalam bahasa mudah2 kasik korang semua paham..(utk org yang x belajo econs yer)
*****
Source: SAM Text Book, Mr.Yee's notes and the picture from web
Definition: Business cycle is repeated pattern of peaks and troughs of economic activity.
There are four phases of business cycle: Peak-->downturn-->Trough-->upturn
Sumber
Boom/peak:
A boom period is a period of high economic activity.
-production and consumption level is high
-investment of businessman is high-->confident of the future-->expectations are high
-demand for resources (land, labour, capital goods) high-->create full employment or near full employment-->unemployment rate decreases as ppl look for job as they are confident with the economy
-high demand of resources(particularly labour) lead to shortages-->producers charge high price to cover high cost of production (high wages paid to labour)-->inflation occurs
-firms' investment slows down after a period of spending-->because they may have bought all the capital goods needed for production-->lead to downturn
Contraction/Downturn:
Economic activity begins to fade.
-production and consumption level decreases
-investment of businessman decreases-->less confident of the future
-fewer resources are demanded (land, labour, capital goods)-->unemployment rate increases
-resources less demanded lead to surplus-->producers will reduce both price and production-->inflation less serious
Troughs/Recession:
Economic activity at low level.
-production and consumption level is low
-investment of businessman is low--> not confident of the future-->expectations are low
-demand for resources (land, labour, capital goods) low-->unemployment rate is high as people are not demanded in labour market
-low demand of resources-->low cost of production-->producers charge low price-->inflation rates fall to relative low levels-->term for falling price is deflation
-business failure is more likely during recession
**Very high unemployment and very prolonged period of very low activity is a depression
Upturn/Expansion/Recovery:
Economic activity starts to recover. Usually because of investment spending-->need to replace worn equipment
-production and consumption level increases
-investment of businessman increases-->more confident of the future-->expectations increasing
-spending increases-->more resources are demanded (land, labour, capital goods) -->create employment-->unemployment rate begins to fall as ppl look for job as they are confident with the economy
-production increases-->factory overtime increases, and excess capacity used up-->price rises slowly-->inflation
Glossary
Recession: a period when more than 2 quarters of negative growth (negative GDP-Gross Domestic Product)
Inflation: Increase in general price level, which is measured by using Consumer Price Index
***This is just a theory and concept of business cycle in order to understand how the economics work. The real situation may be slightly differ from what I wrote here..
p/s:
-saya tidak suka menulis, sebab saya tahu saya benci membaca paragraph yang panjang2..jadi saya merasakan short note lebih baik..:)
-oleh sebab saya belajar econs in english, so saya tidak dapat menukar semua istilah kepada malay..
-sesiapa yang tak paham boleh tanya, atau ada yang mahu komen atau tambah, anda semua dialu-alukan
-saya budak baru belajar, kalau salah tolong tunjukkan...
A boom period is a period of high economic activity.
-production and consumption level is high
-investment of businessman is high-->confident of the future-->expectations are high
-demand for resources (land, labour, capital goods) high-->create full employment or near full employment-->unemployment rate decreases as ppl look for job as they are confident with the economy
-high demand of resources(particularly labour) lead to shortages-->producers charge high price to cover high cost of production (high wages paid to labour)-->inflation occurs
-firms' investment slows down after a period of spending-->because they may have bought all the capital goods needed for production-->lead to downturn
Contraction/Downturn:
Economic activity begins to fade.
-production and consumption level decreases
-investment of businessman decreases-->less confident of the future
-fewer resources are demanded (land, labour, capital goods)-->unemployment rate increases
-resources less demanded lead to surplus-->producers will reduce both price and production-->inflation less serious
Troughs/Recession:
Economic activity at low level.
-production and consumption level is low
-investment of businessman is low--> not confident of the future-->expectations are low
-demand for resources (land, labour, capital goods) low-->unemployment rate is high as people are not demanded in labour market
-low demand of resources-->low cost of production-->producers charge low price-->inflation rates fall to relative low levels-->term for falling price is deflation
-business failure is more likely during recession
**Very high unemployment and very prolonged period of very low activity is a depression
Upturn/Expansion/Recovery:
Economic activity starts to recover. Usually because of investment spending-->need to replace worn equipment
-production and consumption level increases
-investment of businessman increases-->more confident of the future-->expectations increasing
-spending increases-->more resources are demanded (land, labour, capital goods) -->create employment-->unemployment rate begins to fall as ppl look for job as they are confident with the economy
-production increases-->factory overtime increases, and excess capacity used up-->price rises slowly-->inflation
Glossary
Recession: a period when more than 2 quarters of negative growth (negative GDP-Gross Domestic Product)
Inflation: Increase in general price level, which is measured by using Consumer Price Index
***This is just a theory and concept of business cycle in order to understand how the economics work. The real situation may be slightly differ from what I wrote here..
p/s:
-saya tidak suka menulis, sebab saya tahu saya benci membaca paragraph yang panjang2..jadi saya merasakan short note lebih baik..:)
-oleh sebab saya belajar econs in english, so saya tidak dapat menukar semua istilah kepada malay..
-sesiapa yang tak paham boleh tanya, atau ada yang mahu komen atau tambah, anda semua dialu-alukan
-saya budak baru belajar, kalau salah tolong tunjukkan...
