The Trade Cycle: Questions and Answers [2001]


Chris Larham’s responses to a series of questions relating to the trade cycle [2001] can be opened in a print-friendly text document format here
An image of the original marked work can be seen here
An image of Chris Larham’s ‘A’-graded AS Level Business Studies certificate can be seen here

The Trade Cycle: Questions and Answers [2001]

{Essay CONTENTS: Effects of economic recession; definition of ‘consumer durables’; stock level management; business preparation for recession; Government responses to ‘boom and bust’ economies; ‘CBI’ definition; ‘self-fulfilling prophecy’ definition; official Government line during economic recession.}

1.) Under trade cycle characteristics, what do you expect to happen when the economy goes into recession?

  • workers start saving money (disposable income stays the same)
  • less money in economy
  • fewer business start-ups
  • interest rates are reduced
  • increased business closures
  • consumer demand for goods and services decrease
  • low consumer confidence
  • companies reduce output
  • staff redundancy
  • cancel capital investment
  • reduce orders of supplies


2.) What are consumer durables?

  • ‘big-ticket’ items
  • ‘white goods’


3.) “Stock building during recovery and de-stocking in recession?”

  • increasing stock levels in readiness for increased demand
  • decreasing stock levels in readiness for decreased demand


4.) How should firms prepare for a recession?

  • ensure liquidity is high and borrowings low to survive an unexpectedly bad year or so


5.)What have Governments tried to do in the ‘boom and bust’ economies?

  • try to break the cycle; provide a more stable economy for businesses to operate in; improve business and consumer confidence; enable businesses to plan ahead with more accuracy – decreasing fluctuations in the economy


6.) What is the CBI?

  • a research group, Confederation of British Industry, measuring business confidence on a quarterly basis


7.) What is meant by a self-fulfilling prophecy?

  • where your actions are governed by your intentions – prediction changes attitudes and actions


8.) Why would the Government wish to ‘talk up’ the economy during a recession?

  • confidence produces a self-fulfilling prophecy – optimistic outlook increasing spending


Copyright 2016-present day Permission to use quotations from this AS Level Business Studies essay is granted subject to appropriate credit being given to Chris Larham and as authorial and website sources, respectively.
Web design certified by:
An image of the w3schools logo An image of the SoloLearn logo An image of the Skillsology logo
Click images for proof of certification.

Forty-year-old father of three wonderful children [William, Seth, and Alyssa]. Works as an Assistant Technical Officer in the Sterile Services Department of Treliske Hospital, Cornwall. Enjoys jogging, web design, learning programming languages, and supporting Arsenal FC. Obtained a BA degree in English from the University of Bolton in 2008, and has continued to gain qualifications in a diverse range of subjects thereafter.

Tagged with: , , ,
Posted in AS Level Business Studies [A1]

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.