Identify the phase of the business cycle described in each statement below. "1. Stores continue to place large orders to keep up with growing demand. 2. Business surpluses accumulate because consumer demand has fallen off. 3. Depression prices lead to increased demand for certain goods and services.. 4. Consumers begin to cut back on spending for luxuries such as entertainment. 5. There is a boom in vacation real estate investments. 6. Car dealers lower prices and offer rebates to attract customers. 7. A large number of major corporations and banks go out of business. 8. New high tech businesses begin hiring many of the unemployed. 9. The number of banks loaning money to prospective homeowners reaches an all-time high. 10. Stock prices plummet and unemployment is widespread.
Identify the phase of the business cycle described in each statement below. "1. Stores continue to place large orders to keep up with growing demand. 2. Business surpluses accumulate because consumer demand has fallen off. 3. Depression prices lead to increased demand for certain goods and services.. 4. Consumers begin to cut back on spending for luxuries such as entertainment. 5. There is a boom in vacation real estate investments. 6. Car dealers lower prices and offer rebates to attract customers. 7. A large number of major corporations and banks go out of business. 8. New high tech businesses begin hiring many of the unemployed. 9. The number of banks loaning money to prospective homeowners reaches an all-time high. 10. Stock prices plummet and unemployment is widespread.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:rach phase of the business cycle has certain characteristics. During peak or prosperity, businesses expand
end employment is high. Creditors lend money freely; wages, consumer spending, and prices rise.
Contraction begins when production begins to slow some because most people who want a good have
aiready purchased the good. As the business cycle moves downward a recession might occur. During a
recession, businesses readjust to reduced demand, unemployment rises, consumer spending and prices fall,
and creditors restrict loans. If the recession continues or worsens, it becomes a depression. The lowest point
of a depression is called a trough. Eventually, technology, government programs, international developments,
or low depression prices cause an increase in demand. As business adjusts and begins to expand again, the
cycle moves upward through a recovery or expansion phase-back to peak or prosperity.
Identify the phase of the business cycle described in each statement below.
Band
"1. Stores continue to place large orders to keep up with growing demand.
2. Business surpluses accumulate because consumer demand has fallen off.
3. Depression prices lead to increased demand for certain goods and services..
4. Consumers begin to cut back on spending for luxuries such as entertainment.
5. There is a boom in vacation real estate investments.
6. Car dealers lower prices and offer rebates to attract customers.
7. A large number of major corporations and banks go out of business.
8. New high tech businesses begin hiring many of the unemployed.
9. The number of banks loaning money to prospective homeowners reaches an
all-time high.
10. Stock prices plummet and unemployment is widespread.
Cr
the
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