Topics: Business cycle, Economic policy, Unemployment Pages: 2 (621 words) Published: February 19, 2013
Carlos Cruz
Prof. Osbourne
11:00-11:50am M, W, F
What Do You Understand
By a Business Cycle?

The purpose of this essay is to understand what a business cycle is and to acknowledge the importance of knowing about it. What is a business cycle? It is periods during which a business, an industry or the entire economy expands and contracts. T is very important for us student to know about it for many reasons and one of the most important is that someday we business students want to have our own company and we have to know about the business cycle to determine which is the best time to make a business risk decision. Many business cycles are anything but regular. They vary in intensity and length. Expansions and contractions of the economy, also sometimes referred to as booms and busts, are broad economic events that affect many industries and companies. I hope this essay make business student get interested in the business cycle process because will help them in their near future. Some random events can be beneficial to some businesses. A roofing company, for example, could see a boom in business immediately after a destructive hailstorm strikes its service area. It doesn't pay to structure your business around hoping for disaster, but you should be ready to swing into action when random events create extra demand for your products and services. The characteristics of economic cycles include: Fluctuations tend to affect durable manufactured goods more than services, Wholesale and industrial prices tend to be affected more than retail prices, Short-term interest rates track and amplify the cycles, moving in an exaggerated manner along with the economy. Business cycles are also affected by seasons of the year, holidays and other recurring events. Bathing suits and sunscreen, for example, sell well in spring and summer, poorly in fall and winter. The opposite is true of coats and gloves. Less well-known examples include fast-food...
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