The business cycle is the change in the economy that takes place over a period of time in a
country also known as the growth and decline of a business. There are four phases of the
business cycle: Expansion, peak, contraction, and trough. Each phase plays a vivid part of
completing the business cycle.
1. Expansion stage: is just what it says; it's the stage where the business is expanding
and growing in employment wages, profit and many other areas of the business.
Everything about the business at this stage is high: Supply of money, investment, and
debt is paid on time.
2. Peak stage: at this stage the peak has been reached, the economy reaches a saturation
point and the maximum growth has also been attained. During this stage consumers
usually restructure the budget for the next period.
3. Contraction stage: during this stage the business is starting to decline, it is the
beginning of the recession. At this point growth slows, prices stagnate and
employment falls.
4. Trough stage: during this stage there is abundant depletion of national income and
the growth rate becomes negative. Everything in this stage meets its lowest point for
example the supply and demand of goods and services.
If anyone is familiar with the lifestyle of a military contractor one day we will have an
amazing six figure job and the next day they may tell you that the contract has been bought
out because of budge and everyone will either lose half of their pay or be terminated. When
the contract is at its peak season: the pay is well, the business is going well, and we are
working 12-14 hours a day because there is so much business. Sometimes more than they
can handle! Once they have decided that another company can come in and do the job for a
lower price, the business will start to decline (Contraction stage). At this point the business
will start to slow down and they will start making the cuts. I believe this could be corrected
by getting ahead of the budget before it's too late! Planning ahead and spending less in the
expansion stage. military defense spending directly creates jobs and indirectly improves
economic production through the transfer of technology and human capital to the civilian
economy. On the contrary, has opportunity costs since it diverts resources away from other
government programs that could do more to encourage growth. There are 4 phases of the
business cycle which include expansion, peak, contraction, and trough, During the expansion
phase there is an increase in consumer confidence where people spend more money and pay
their debts more comfortably. A lot of companies thrive during this phase of the business
cycle. In the peak phase of the business cycle it is the instance right before economic
indicators start to fall. During this time prices are at their highest and the economy can
"overheat" which means businesses can no longer satisfy consumer demands. After the peak
stage it is the contraction stage and during this stage business owners focus on finding ways
to improve their financial situation, like how they can save money or become more
competitive. The last phase is the trough phase and during this stage, supply and demand
decline significantly and employees do not have as many materials. It is common that during
this stage companies lay off employees or close.
A real-life example that I have experienced is the trough phase. I have worked for a
company and business began to slow up tremendously so they began to lay employees off
and then the company eventually closed all together. Also a lot of companies experienced
this stage of the business cycle during the pandemic. We seen a lot of companies close for
good. I feel like we all are experiencing the peak stage of businesses right now with
everything going up such as gas being the highest its ever been. By business slowing up and
having to lay some people off it causes the company to go out of business because they were
not making enough money to pay their employees and keep the business running. The
pandemic cause unemployment to go sky high, there was so many people on unemployment
due to being out of work. With gas being so high people aren't able to afford gas and look to
other ways to commute back and forth to work. The four different phases of the business
cycle, are expansion, peak, recession, and trough. Expansion I feel happens when a company
or when the economy can offer a raise in salary, offer unemployment and where real GDP
has increased. Peak is when real GDP has increased as far as it can and it is at the end of
expansion. Recession is when the economy has suffered great loss or a decline for at least
two quarters. Trough is when real GDP has reached a minimum, and it also marks the end of
a recession. I work for a logistic company. I feel that when covid hit our country not only
suffered from loss of our love ones, but some individuals suffered loss of employment. With
changes that were made to the entire country. The government stepped in to where
companies offered covid pay. Our company had individuals taking advantage of covid pay.
The government offered unemployment pay. I have know problem with individuals
receiving unemployment that really deserve unemployment, but I knew individuals that were
working and collecting unemployment. Individuals would use covid pay and were not ill or
even came in contact with covid. They would work only two days a week in a four day work
week, and then apply for unemployment. So not only would the individual receive a pay
check for forty hours worked in a two week pay period but also receive a check for
unemployment, because it appears as though the individual has started out as a full time
worker, but now the individual is a part-time worker due to covid. This not only caused an
issue with unemployment, but my company also has an individual that was originally hired
to work forty hours a week, the individual is only working twenty hours a week. My
company now has to hire more staff because now the work is falling on someone else. Since
covid has hit individuals jobs has been lost because companies had to close. Restaurants,
some suffered, clothing stores, individuals began shopping on line, grocery stores are not
fully stocked, store hours have changed. Our economy is possible headed for a recession. If
the price of gas continues to increase, how will we continue to receive our goods? If food
continues to increase how will we be able to afford to feed our families? The company that I
work for They have tried to increase pay, offer commuting options. My company at one
point was a great place to work, but with everything going on with the economy and since
covid. My company has lost its integrity. It has changed its hiring practices. We no longer
have a dress code, so individuals are coming to work as though they are going to the club.
We are not drug screening, individuals are getting high at work, this is just to name a few.
My company need to return to drug screening, implement the dress code, and regain its
integrity. While prices of some goods have come down, they are nowhere near where they
were before the pandemic. While watching my local news tonight, they were talking about
the prices of cattle. Apparently, Virginia is the eighteenth largest supplier of beef in
America. Some of the cattle ranchers were interviewed and they all stated that prices for
cattle have pretty much stayed the same, but it was the prices for fertilizer and hay that have
gone up making the price for beef rise. The business cycle has four phases.
1. This phase represents the health of an economy by showing the nearly full
employment level.
2. This occurs when there is a decline in economic output for at least six consecutive
months.
3. This phase is the lowest point of economic activity. This marks the end of a recession
and is the precursor to the expansion phase.
4. This occurs after the trough, meaning the economy is recovering.
During the pandemic, prices for goods including food, gasoline, homes, and vehicles rose
tremendously. I would categorize this as the trough phase of the business cycle. Many
people were out of work and many businesses were closed due to lock-down protocols and
some even went out of business.
With gas prices slowly declining and prices for other goods lowering, I think the economy is
in its’ expansion phase, and is beginning to recover as we are seeing pre- trough phase
output returning to levels before a recession. Although the pandemic hasn’t been technically
classified as a recession, I am curious why not? Is it because the pandemic was an outside
force that forced economies around the world to shut down? Many people have said ‘were in
a recession’ but it has not been classified as such. How is that the economy can make it feel
like we are in a recession?
My family, luckily, was not impacted by the pandemic as I work at a grocery store and my
spouse is active duty. With me in retail the business I work for saw more customers than
ever because grocery shopping was classified as essential. I was working more, not less. My
spouse is salary, so regardless of his workplace input he gets paid the same. Based on the
circumstances provided, some restaurants started to offer curbside pick-up because
customers could no longer dine-in. To entice more customers, a lot of states were allowed to
sell alcoholic beverages to-go. It is interesting the theory of supply and demand, when prices
go up when the demand is higher than the supply. It is even more interesting that during a
global crisis such as covid that the prices go up so high for our basic needs when the people
are bringing in little to now income to afford the rise in prices. It baffles me that empathy
does not come into play during times like what we went through and still are as a result of
crisis like the covid pandemic. I also knew some individuals that were, innocence, double
dipping from pay because they were receiving unemployment pay while working for cash at
other places that were paying them under the table. It made me nervous for them at the time
because I was wondering if they were going to be required to pay back the COVID pay at
any point after they were living their lavish COVID lifestyle and enjoying their time off with
pockets full of cash to spend. I did put in for two weeks worth of unemployment when we
were temporarily shut down where I was working, but win we had future weeks of
unemployment at work I did not bother filing for the unemployment money. It seemed like
it would be a greater debt on our government went out of time I did not really need the extra
cash. Sure, it would have been nice do you have extra money, everybody wants to have that
extra coin in their pocket. However, sometimes I worry that if too many people abuse the
system it is going to hurt the people that actually need it later.
