DEPARTMENT OF TECHNICAL

EDUCATION ANDHRA PRADESH

Name : R. Mohan
Designation : Head of CCP Section
Branch : DCCP
Institution : G.M.R Polytechnic, Gajwel,
Medak (Dist.)
Year/Semester : VI Semester
Subject : Business Economics-II
Subject Code : CCP-602
Topic : Trade Cycles
Duration : 50 minutes.
Sub-topic : Phases of Trade cycles-Recession
Teaching Aids : PPT, Animations
CCP602.46 1
Objectives:

On completion of this period you will be able

to know :

 Recession ( Upper turning point)

CCP602.46 2
Recap:

We have already learnt in the previous class about :

 Trade cycle
 Features of Trade Cycle
Prosperity

CCP602.46 3
Recession

 It is a turn from Prosperity to depression

 When prosperity ends recession begins
 It is a turning point and not a stage
 It will last relatively for a short period

CCP602.46 4
 Contd.,

 It is a point at which the forces which favour

contraction win over the forces of Expansion

 The liquidation in the stock market, reluctance of

businessmen to borrow bank loan and decline in
prices are initial symptoms

CCP602.46 5
 Contd.,

 There will be sudden changes in the stock market,

and prices will fall

 It is the stock market which will experience the

down fall first

CCP602.46 6
 Contd.,

 Businessmen loose confidence and become

pessimistic about future profits

 Investments will be drastically reduced

 Bankers and the people in general will prefer

greater liquidity

CCP602.46 7
 Contd.,

 Business expansion will stop

 Orders will be cancelled and workers will be laid off

 This will lead to increased unemploymet

 Income will fall leading to reduced expenditure

 Demand will fall, in turn prices profits and business

activities

CCP602.46 8
Summary:

Recession starts when the prosperity ends

It is turning point and not a phase

CCP602.46 9
Quiz

2. Recession follow _______________

3. Recession is a _________________

Answer : 1. Prosperity
2. turning point

CCP602.46 10
Frequently Asked Questions

2. Explain the Recession stage in the Business

cycle

CCP602.46 11