Analysis of the Business Cycle Essay Example | Topics and Well Written Essays - 1000 words

Analysis of the Business Cycle - Essay ExampleThe fall in States unemployment set out in May 2011 was 9.1 pct slightly higher than that of April 2011 which was 9 percent. Employment says in brass sectors continued to decline while job opportunities were gene countd in private sector, health care and mining. The number of discharged person in May 2011 was 13.9 million. Inflation rate in United States has a continuously climb turn off. It has systematically increased from 1.6 percent in January 2011 to 3.13 percent in June 2011. While in April and may it sustain on 3.2 percent. United States economy harvest-feast rate has greatly decelerated since last few years the in a higher place analyzed data shows that United States economy is in a phase of slow recovery with its 3.3 percent gross domestic product growth rate. There had been fluctuations in inflation and unemployment rate- slight increases and decreases and some times the rate preserve at one level. The growth rate her e is very slow and it is insufficient for the recovery of United States economy. With the same growth rate it can be projected that the recovery of the economy will facilitate up in 2015. By bringing reduce the inflation and unemployment rate and increasing the GDP growth rate United States can fasten up its recovery stage. There had been high rising trends in United States GDP growth rate. It was the highest in the year 1990 with an amazing growth rate of 10.5 percent. A noncompetitive firm has to analyze the GDP growth rate, inflation rate and unemployment rate of the economy very conservatively as these aspects can have a direct effect on its assiduity greet and gross sales rate. As we can see a rising trend in GDP growth it shows that the only economy is in function and there is an increase in aggregate acquire which in go game increases the inflation by demand pull and cost push. At this stage a competitive noncompetitive firm must increase its sales as there is a hu ge amount of property facing a little amount of goods. An increase in sales can occur when the GDP growth rate is increasing along with the inflation rate. But when there is a negative trend of gross domestic product a monopolistic firm may face a reduction in its sales rate. Because the economy is functioning in a slow manner the aggregate demand decreases and therefore the firms have to cut down their sales in order to avoid losses. The functioning of a competitive monopolistic firm here would be that it would increase its sales because the data shows an increase in GDP growth rate from 1.8 percent to 3.3 percent which in turn has increased the inflation rate as well from 1.6 percent to 3.13 percent. The monopolistic firm should also cut down its labor cost very cautiously. The wages cost is comparatively lower when the unemployment rate is low and it is slightly higher when the unemployment rate is high. Here the unemployment rate is increasing, as it was 9 percent in April and 9.1 percent in May and the monopolistic firm can cut down its cost but the firms should keep in concern that the labor or wage cost increases with the increase in GDP. If the firm will not keep an nub on increasing GDP rate and will cut down its cost to the minimum bushel then a competitive firm will become uncompetitive because when the economy picks up and the crude Domestic Product rises the increase in labor or wage cost may double-quick than the increase in sales of the firm. Under the present circumstances the firm can cut down its cost slightly and should keep a precautious look on GDP growth rate and unemploy