Inter-Workings of the Economy

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1 Inter-Workings of the Economy Amber Bouchonville Rasmussen University G123/ECO1000 Section 02 Principles of Economics Professor Laura Sheneman November 5, 2023

2 Inter-Workings of the Economy Smartphone sales can be strongly influenced by economic fluctuations. People tend to have more disposable income during times of economic expansion, when the economy is doing well and are more likely to purchase smartphones. When the economy slows down during economic contractions or recessions, people may cut back on non-essential spending, including smartphone purchases. As a result, smartphone demand can be directly influenced by the ups and downs of the economy. Here are the four phases of the business cycle that influence economic fluctuations. The first phase is the expansion phase, during which the economy is growing, businesses are flourishing, and employment rates tend to be high. A peak phase is when economic activity is at its highest. Following that, we will experience a contraction phase when the economy slows down, businesses struggle, and unemployment rates rise. Finally, we have the trough phase, which is the lowest point of the business cycle, when the economy reaches rock bottom before recovering. Smartphone sales can be heavily influenced by unemployment levels. In times of high unemployment, people may prioritize essential expenses over purchasing new smartphones. They might be more cautious with their spending and delay purchasing non-essential items, such as smartphones. Conversely, when unemployment levels are low, people may be more confident in their financial situation and willing to invest in smartphones. Therefore, unemployment has a direct impact on smartphone sales. In the event of a decrease in the labor force participation rate, fewer people will be actively participating in the workforce by either working or actively seeking employment. As a result, the sale of smartphones can suffer as people may have less disposable income to spend on non-essential items like smartphones when they are not working or looking for work. In October 2023, the labor force participation rate in the United States was 62.4%, which is the percentage of working-age people (16 years and older) who are employed or actively seeking employment. The United States labor force participation rate was among the highest in the world in October 2023.

3 References The University of Scranton. (2021, April 29). How the Smartphone has Impacted Economic Development | Scranton Univ. The University of Scranton. https://elearning.scranton.edu/resources/article/how-the-smartphone-has-impacted-economic- development/ Kunert, P. (n.d.). Inflation scuppers any growth prospects for smartphone sales . Www.theregister.com. Retrieved November 7, 2023, from https://www.theregister.com/2022/09/01/inflation_smartphone_growth_idc/#:~:text=Inflation %20to%20kill%20growth%20prospects%20for%20smartphone%20sales&text=According%20to %20analysts%20at%20IDC Blackboard Learn . (n.d.). Learning.rasmussen.edu. https://learning.rasmussen.edu/ultra/courses/_142882_1/outline/edit/document/_14792547_1 ?courseId=_142882_1&view=content Blackboard Learn . (n.d.). Learning.rasmussen.edu. https://learning.rasmussen.edu/ultra/courses/_142882_1/outline/edit/document/_14792549_1 ?courseId=_142882_1&view=content

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