Explanation of economic cycles in aggregate economic activity is one of the primary concerns of the economy. Economic cycle also known as economic fluctuations refer to long term steady growth. It involves economic expansion and contraction. Expansion and contraction alternate. In any given company, be it industrial or economical, there are aspects that are I continuous fluctuation and they are constantly against each other.
Economic fluctuations slow down but economic development still has to return to the total demand and supply balance. If the current round of economic cycle is comprehensively analyzed, they show the virtual economy and real economy interaction as well as the risk of global economic integration. Inflation and deflation still results from economic expansions and contractions. There is also credit crisis throughout the entire economic cycle. Therefore the effect of economic fluctuations is very significant in any economic institution. These fluctuations generally increase the risk of credit default swaps. As long as companies develop a strategic plan to deal with economic cycles, some situations can be rather difficult to control. This all starts with cost control and goes all the way to accounting policies and asset allocation.
Economic expansion is the increase in the level of economic activity, and of the goods available in the market place. Typically, an economic expansion is characterized by an upturn in production. Economic expansion and contraction relate to the overall output of all goods and services, while the terms inflation and deflation refer to the increasing and decreasing prices of commodities and services in relation to the value and availability of money.
Reports from the Fed's Beige Book suggest that national economic activity continues to rise. Manufacturing activity continued to expand with production of new orders rising across most districts. Demand for non financial services was reported to be stable to modestly increasing. Consumer spending was steady but consumers remained price-sensitive. The recent reports may be of great significance in the growth of my company in so very many ways.
Through this report in can be able to use the results in putting up strategies that lead toward economic achievement. This may include consumer spending and tourism. Retail spending should be moderately positive in order to regain confidence. I can make new sales during the tourist reporting period and thereby increasing the income. I add more holiday staff than usual
Banking and finance should be kept in mind. Lending should be stable. There should be pressure to price loans. This should be done more aggressively. The demand for loans should be ignored because in most cases public policies are uncertain. Loan standards should be tight. Credit quality should change on balance.
Prices and wages should be a point of focus. Input cost should rise but prices of final goods should still remain stable. Wage pressure should be minimal. Wage increases should be little. This way, hiring remains limited and therefore reluctance in permanent payrolls should be a point of discussion. Still in my coping strategies, the demand for information technology should remain solid. This enhances the efficiency of production.
In conclusion, the fluctuations in economics are usually the primary concerns in the general topic of economic cycle. Business cycles show the possibility that the economy may reach short term equilibrium at levels below or above full employment.