In this assignment, I am going to write about a business that I am familiar with, KFC. I am going to describe how KFC will be affected by each stage of the business cycle.

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  1. Describe the likely effects on Balfour Beatty or a business of your choice of variations in the economic environment.

In this assignment, I am going to write about a business that I am familiar with, KFC. I am going to describe how KFC will be affected by each stage of the business cycle.

Business Cycle

What Does Business Cycle Mean?

Over a period of time, there are changes in the level of economic activity of the economy. There are years where the economic growth is strong and some years where it tends to be slow. The pattern of these changes is called the business cycle.

When the economy grows, we notice that the number of employed people increase and the number of unemployed people decrease.  There is more buying and selling in businesses and this encourages the businesses to employ more staff to make the goods and services to customers to buy.

When the economic growth is slow, unemployment increases and a lot of people cut down on their spending. Business will notice that customers spending patterns have changes and this will affect them as they will not have enough sales and this might lead to them cutting down jobs, in order to cut cost.


The recurring and fluctuating levels of economic activity that an economy experiences over a long period of time (
)

There are five stages in the business cycle. These include RECOVERY, BOOM, and RECESSION AND SLUMP.

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The business cycle is often expressed like the diagram below.

BOOM:

During the boom period, buyers find themselves paying increasingly higher prices for their goods. Profit can be made during a boom period during a boom cycle of the market but fortunes can be lost and when the boom period ends and stock prices may rise.

RESESSION:

A recession is when an economy experience slow growth. During this period, we notice that the number of unemployment rises, interest rates is high and the amount of buying and selling is reduced.

SLUMP: Slump ...

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