One of the principals that we as a country of

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One of the principals that we as a country of immigrants lives on is that we  are willing to take risks Gross Domestic Product (GDP) o Where It Comes From (Sources of Income): GDP = Consumption + Investment + Government Spending + Exports Approximately 70% of our GDP is wrapped up in consumption We spend money on 2 things Things that we need – Nondurables Things that we want - Durables o Where It Goes To (Uses of Income): GDP = Consumption + Savings + Taxes + Imports Economic Challenges o Recession: 2 consecutive quarters of negative GDP growth o Depression: A severe depression o Unemployment: present during the deep economic troughs o High Inflation and Deflation o Economic Inequity There are challenges no matter where you are on an economic cycle o During boom times you can have high inflation Economic: study of social patters Economic Cycles are a lot like a roller coaster
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o They’re based on your behavior and my behavior o Middle ground is the best place to be Your biggest problem areas are during contraction and expansion Fiscal policy and Monetary policy o Government policy seeks to flatten out economic cycles: Lift troughs up and  bring peaks down o Fiscal policy GDP = Consumption + Investment + Government Spending + Exports GDP = Consumption + Savings + Taxes + Imports o Monetary Policy GDP = MS * V GDP = Gross Domestic Product Ms = Money Supply V = Velocity (rate of use of money) Impact of Economic Cycles on Business o Cyclical Business Health care Utilities Oil/Petroleum o Counter Cyclical Businesses o Non-Cyclical Businesses McDonalds Cheap Wine Grocery Stores o Seasonal Business
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