Economic Growth pg 82-83

Cycle phase: Peak or Boom
Features:

• economic activity at highest level
• consumer expenditure, investment, export earnings high
• unemployment low
• employees likely to receive raises
• higher levels of profit

Cycle phase: Recession
Features:

• occurs when dip in level of economics activity for 2 consecutive quarters (1/2 year)
• declining aggregat demand
• lower investment expenditure
• falling export sales
• rising unemployment

Cycle phase: Slump or trough
Features:

• bottom of recession (last stage of decline)
• high level of unemployment
  
• low levels of consumer spending, investment, export earnings

Cycle phase: Recovery or expansion

• occurs when level of GDP starts to rise again
• consumption, investment, ecports, employment will gradually rise

3) Explain 4 ways businesses can cope with a recession
Cost reduction -

• methods such as decreasing lighting and energy bills
• better prices in all matters to decrease total costs
• relocation to cheaper location
  
• finally, reduce workforce
  

Price reduction -

• this can aid to increase sales or maintain the number of sales
• the population is more aware of decrease in prices during recession, especially, vehicles
  

non-pricing strategies -

• special offers and repackaging
• this can help increase the sales of products
  

outsourcing -

• production should occur overseas where the costs are lower therefore giving the firm an edge over others, competitive prices, profit can be increased as well --> therefore, reducing impact of recession

4) How does growth occur via improved quality factors of production?
Growth via improved quality factors of production needs an investment in many of the key resources. examples include:

education and training: The labor force would work more efficiently and productively if they undergo intense training and more education.
health technology: This technology helps keep the work force healthy, which certainly means that a healthy work force works better. This can also keep the work force intact and no retirements etc due to sicknesses.
Capital goods: the higher the economic growth as the the level of investment

5) How can the labor force of a country change?
The labor force of a country could change due to the following reasons:

Changes in demography: A decrease in birth rate in developed countries has led to a smaller workforce because of the ageing population. On the other hard, baby boom could lead to a larger workforce in a few years time.

Changes in participation rates: Participation rates is defined by the number of people who are self employed or employed as % of total labor force. higher percentage rate caused possibly by government incentives (eg: lower income tax)

Changes in net migration: immigration (number of people entering country for work), emigration (those leaving a country). net migration figure positive --> size of workforce increases, therefore aiding productive capacity of economy

6) Describe barriers to growth for LEDC's.
LEDC's are economically less developed countries, or poor countries. These countries find development a great challenge, therefore, working as a barrier against companies who are wanting to expand overseas. One of the important barriers that LEDC's face is the lack of infrastructure. This can be defined by countries that do not have needs such as electricity and road networks for transportation.

Another barrier faced by poor countries is the rapid population growth. The more the population, the more the strain on the country to feed its population therefore affecting growth.

There is a lack of technical knowledge and a skilled labor force in LEDC's however it is certainly required to generate economic activity and growth, therefore, creating another barrier.

LEDC's are required to pay loans that have increased due to interests, hence, leaving a little money for development. this is called 'suffering a high foreign debt repayment' and is another barrier to economic growth.