ase help me figure out how to go about answering these questions, I got very confused and felt terribly stuck on how to go about them and what they meant. I attached what they gave me and the instructions. Thank you so much! Exercise 1. The Graphs (in image) Write a brief description, based on what you see in the charts/graphs, of the following phases of the business cycle: Trough: Expansion: Peak: Recession: Exercise 2. The Table (in image) Review the information on the business cycle, then complete the chart below describing conditions in the phase of the business cycle. For example, "Housing Construction." What happens to housing construction during an expansion? Does it increase or decline? That's what you need to describe. Note: these should be descriptions, not one word answers. Explanation of Four Phases of Business Cycle Prosperity Phase: When there is an expansion of output, income, employment, prices and profits, there is also a rise in the standard of living. This period is termed as 'prosperity phase'. The features of prosperity are: High level of output and trade. High level of effective demand. High level of income and employment Rising Interest rates. Inflation Large expansion of bank credit. Overall business optimism. A high level of MEC (Marginal Efficiency of Capital) and investment. Due to full employment of resources, the level

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 11MC

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Please help me figure out how to go about answering these questions, I got very confused and felt terribly stuck on how to go about them and what they meant. I attached what they gave me and the instructions. Thank you so much! Exercise 1. The Graphs (in image) Write a brief description, based on what you see in the charts/graphs, of the following phases of the business cycle: Trough: Expansion: Peak: Recession: Exercise 2. The Table (in image) Review the information on the business cycle, then complete the chart below describing conditions in the phase of the business cycle. For example, "Housing Construction." What happens to housing construction during an expansion? Does it increase or decline? That's what you need to describe. Note: these should be descriptions, not one word answers. Explanation of Four Phases of Business Cycle Prosperity Phase: When there is an expansion of output, income, employment, prices and profits, there is also a rise in the standard of living. This period is termed as 'prosperity phase'. The features of prosperity are: High level of output and trade. High level of effective demand. High level of income and employment Rising Interest rates. Inflation Large expansion of bank credit. Overall business optimism. A high level of MEC (Marginal Efficiency of Capital) and investment. Due to full employment of resources, the level of production is maximum and there is a rise in GNP (Gross National Product). Due to high level of economic activity, it causes a rise in prices and profits. There is an upswing and the economic activity and economy reaches its Peak. This is also called a Boom Period.

of
Business
Cycle
INDICATOR Trough Expansion Peak Recession
Interest Rate
Stock Price
Consumer
Confidence
Business
Profits
Consumer
Spending
Industrial
Production
Housing
Construction
Business
Investment
Phases

Figure 1
y
Level of business activity
Trough
Figure 2
Recovery
Prosperity
Boom
Recession Depression
Expansionary/Recovery
Trough
No of Years
Business Cycle
Peak
Contractionary/Recession
Long-run trend of real GDP
Trough
PERIODS OF TIME
Prosperity
Recovery
Full employment
EconEdLink
Expansionary/Recovery

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