The Business Cycle (Economic Activity) – GCSE Business Studies Revision

This revision content is also featured in this video on my YouTube channel!

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The Business Cycle:

1: Growth

  • Economic growth is a rise in economic activity
  • This makes people better off, and jobs are more secure
  • People are less afraid to buy things and buy things on credit
  • Booming is when an economy is growing very fast (much faster than usual)

2: Downturn

  • Economic activity starts to decrease
  • Customers are more cautious about buying things and borrowing money
  • Businesses are more careful about their cash flow

3: Recession

  • If the slow in economic activity is severe, the economy can start to get smaller
  • Recession is when there is negative economic growth and a decrease in sales and production in the economy
  • This makes it difficult for businesses to survive in this economic downturn
  • Sales fall so businesses cut jobs to reduce costs
  • The danger of unemployment and lack of job security makes people more afraid to spend money

4: Recovery

  • This is when the economy stops shrinking and starts to grow again
  • Recovery can take a long time
  • Customers’ confidence starts to increase again
  • The cycle loops back to stage 1: Growth
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About Matt

I like writing, filmmaking, programming and gaming, and prefer creating media to consuming it. On the topic of consumption, I'm also a big fan of eating.
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