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Impact of the Business Cycle Unit 1 Topic 1.5 Yr10 Lesson Objectives 1. At the end of today's lesson you will be able to understand what the Business Cycle is 2. Demonstrate the impact the Business Cycle has on businesses Outcomes • Identify what the Business Cycle is • Understand how it is measured • Demonstrate the various stages and the impact each stage has on a business What does this mean to you? The Business Cycle ‘Fluctuations in the level of economic activity over a period of time’ GDP The Business Cycle Boom Recession Recovery Slump Time The Impact on Businesses High Prices High Wages High Consumer Spending Time The Impact on Businesses High Prices High Wages High Consumer Spending Businesses look for other markets Investments Fall Low Profits Redundancies Time The Impact on Businesses High Prices High Wages High Consumer Spending More redundancies Consistent high unemployment Low Consumer Spending Shops/Factories Close Businesses look for other markets Investments Fall Low Profits Redundancies Time The Impact on Businesses High Prices High Wages High Consumer Spending More redundancies Consistent high unemployment Low Consumer Spending Shops/Factories Close Businesses look for other markets Investments Fall Low Profits Redundancies Increased production Wages rise Unemployment declines Consumers start to spend more Time Lesson Objectives 1. At the end of today's lesson you will be able to understand what the Business Cycle is 2. The effect the Business Cycle has on businesses Outcomes • Identify what the Business Cycle is • Understand how it is measured • Demonstrate the various stages and the effect each stage has on the business cycle Group Slump • What is a slump? • Identify three effects that are likely to occur to a small business in the event of a slump Group Boom • What is a boom? • Identify three effects that are likely to occur to a small business in the event of a Boom Group Recession • What is a recession? • Identify three effects that are likely to occur to a small business in the event of a recession Group Recovery • What is a recovery? • Identify three effects that are likely to occur to a small business in the event of a recovery Group Definition • In your own words and in your own way, define and explain the terms: • Economic Growth • Economic Activity • The Business Cycle • The Economy • Luxury goods • Necessities Q.17 May 2011 Paper Identify three likely effects on a business of a downturn in the business cycle a) Higher sales due to rising consumer incomes b) Lower fixed costs due to lower interest rates c) Less risk of the business becoming insolvent d) More difficult to recruit employees e) Lower demand due to business closures f) Lower prices on goods bought from suppliers Q.17 May 2011 Paper Identify three likely effects on a business of a downturn in the business cycle a) Higher sales due to rising consumer incomes b) Lower fixed costs due to lower interest rates c) Less risk of the business becoming insolvent d) More difficult to recruit employees e) Lower demand due to business closures f) Lower prices on goods bought from suppliers Plenary • Lesson 34 • Plenary section fill in the ‘Missing Words’ and ‘Test Yourself’