Revenue & Receipts Cycle SUBSTANTIVE PROCEDURES - Trade Receivables.
Trade cycle
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Transcript of Trade cycle
GEETA MALIKAssistant Professor
Advanced Educational Institutions
TRADE CYCLE
www.advanced.edu.in
Flow of The PPTMeaning and Definition of Trade Cycle.Nature of Trade Cycle.Fluctuations in Trade Cycle.Causes of Trade Cycle.Phases of Trade Cycle.Global Depression, 1929-1932 Measures To Control Trade Cycle.
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Meaning Of Trade Cycle The trade cycle refers to the ups and
downs in the level of economic activity which extends over a period of several years. If we examine the past statistical record of the business conditions, we will find that business has never run smoothly for ever. There are many fluctuations in the period. Some times prosperity is followed by adversely. In Economics this tendency of the business activities, to fluctuate from prosperity to adversely is called business cycle.www.advanced.edu.in
Definition
Prof. Keynes says : " A trade cycle is composed of periods of bad trade characterized by falling prices and high unemployment percentages while a period of good trade is characterized by rising prices and high employment, percentages."
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Nature Of Trade CycleRECURRING
FLUCATIONS
PERIOD OF TRADE CYCLE IS NO
LONGER THAN A YEAR
SYNCHRONIC INVENTORIES OF GOODS
INTERNATIONAL IN CHARACTER
CONSUMPTION OF NON- DURABLE
GOODS AND SERVICES
PROFITS FLUCTUATE MORE THAN ANY OTHER TYPE OF INCOME
PHENOMENON OF THE CRISIS
PRESENCE OF THE ALTERNATING FORCES OF
EXPATION AND CONTRACTION
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Fluctuations Of Trade CycleSecularSeasonal variationsCyclical fluctuationsMiscellaneous random fluctuations
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Causes Of Trade CycleBanking OperationsCapital goods and consumer goodsPurchasing powerProfit maniaHuman psychologyCyclical changes in weather
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Phases of Trade Cycle
Phases of trade cycle
Depression
Recession
Recovery
Boom
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BOOM/ PEAK
Peak or prosperity phase: Real output in the economy is at a high level
Unemployment is low Domestic output may be at its capacity
Inflation may be high.
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RECESSIONContraction or recession phase: Real output is decreasing Unemployment rate is rising. As contraction continues, inflation
pressure fades. If the recession is prolonged, price
may decline (deflation) The government determinant for a
recession is two consecutive quarters of declining output. www.advanced.edu.in
DEPRESSION√ Trough or depression phase: Lowest point of real GDP Output and unemployment “bottom out” This phase may be short-lived or
prolonged There is no precise decline in output at
which a serious recession becomes a depression.
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RECOVERY√ Expansionary or recovery: Real output in the economy is increasing Unemployment rate is declining The upswing part of the cycle.
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Global Depression, 1929-1932
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MEASURES TO CONTROL TRADE CYCLE Preventive measures:
a) Precise relation between cyclical changes in general business.
b) Nature of the cyclical price movements in relation to the general trade cycle.
Corrective measures:a) Monetary policyb) Fiscal policyc) Direct controlsd) Automatic stabilizerse) Fixed investments policy
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GEETA MALIKAssistant Professor
Advanced Educational InstituteAdvanced Educational Institutions,
70 km Milestone,Delhi-Mathura Road, Dist. Palwal,
Haryana-121105 +91–1275–398400, 302222
www.advanced.edu.in
