A Sharp recession sends firms into receivership while some emerge stronger than ever. Discuss the factors which may determine the effects of a sharp recession upon a firm

Authors Avatar

A Sharp recession sends firms into receivership while some emerge stronger than ever. Discuss the factors which may determine the effects of a sharp recession upon a firm

All businesses go through a recession; these are often due to cyclical changes, which a business goes through. The business cycle consists of a sequence in which a recession is followed by a recovery, which leads into a boom. However if a business goes into a receivership this means the banks take control and often sell bits of the business. When a businesses is booming there will be a downturn leading to a recession which sometimes lead to business losing out al together and this is when they go into receivership.

        When a business goes through a recession the period of the business cycle is usually slow in growth or stagnation. It Isn’t easy to predict what will happen in the economy and at what stage the business is going to experience the different aspects of a business cycle (Boom, Recession, Recovery). So sometimes business are caught out and hit hard by a recession, and can lead to them going out of business. Many businesses rely to much on the government to smooth out problems such as the economy but they find economic forecasting difficult and they sometimes are predicted wrongly. Changes in the economy are important in determining the survival of a business. The importance of government policies and economic policies keep the economy running smoothly but sometimes this goes wrong. I will now discuss the factors, which can lead a business having a sharp recession.        

Join now!

        A recession is a period in which demand is growing more slowly than before, so that large numbers of businesses find they are selling less than they expected to.

Factors, which can affect the sharp recession, can be a rising unemployment, which means skill shortages within a business. The workforce is cut down and people start to lose trust in the business and feel like they are going nowhere in the specific market. The rising level of unemployment internal to a business such as the business losing employees can affect the level of output, which the business is producing. As ...

This is a preview of the whole essay