Business cycle
1. Introduction
Business and industry conditions are not steamed. Move up and down, but no final order. Which is comparable to the pain of birth and death of the organism. Movement will affect business and economic prejudice. This condition is called “Business Cycles”. In normal economic conditions in both the short and long term In the matter of long-term trend that economists want the state to the country. Economy Growth increase in the short-term changes. Story of the business cycle a range of economic activities that look up and down repeatedly during the 4 periods.
1. Theory of business cycles.
The economists try to determine the cause of the economic cycle. Which can be summarized as follows:
External causes economic system as when finding a new
· Internal causes economic system
1. Business cycle changes.
In addition to forecasting to predict future events seek to prevent the economic downturn already. It may be monetary and fiscal policy to fix or to the period of recession. Or fall short and the longer the economic prosperity of these methods may be considered separately below:
1) Monetary Policy
Government can be resolved through the central bank.
A. Start the rediscount rate of bills.
B. Reduction in cash reserve.
C. Buying shares on the market.
2) Fiscal Policy
A. The increased spending.
B. Reducing tax rates.
2. Meaning of Inflation.
Inflation is a situation the general price level, growing continuously.
3. Demand Pull Inflation.
1) Key factor in AD and the excessive inflation up is …
A. Increasing component of total demand.
B. The increase in money supply.
2) Inflation caused by supply side or from the main costs.
1. The impact of inflation.
1) Purchasing power of money
2) Savings and investment
3) Income distribution
4) Finance of the Government
5) Foreign trade
6) The politics of the country
The problem of inflation
- Control prices of some essential to prevent P as much as a reason for that population.
1. Deflation
A condition at any price decline by around quickly and continuously.
2. Tight Money
MS is not sufficient for a loan.
The causes of tight money situation that the result of solving the problem of inflation is not enough for Ms loan and halt the revenue to be short of money and economic impacts continue.
3. Unemployment
Means circumstances people who are of working age ability to work and voluntary work but, unable to find work.
The nature unemployment has two types of people.
1) Voluntary Unemployment
2) Involuntary Unemployment
Normal state of unemployment is usually in the three conditions.
1) Unemployment really
A condition in which no income from work may be short or long term
2) Underemployment
A condition that they may be employed, but employment is a job only 2-3 days per week
3) Disguised unemployment
A condition in which he worked full-time But ineffective.
In normal conditions, then it has unemployment always occur with different causes is …
1) Frictional Unemployment
Occur because of imperfections in labor market where workers lack of knowledge has done some work or some cases that where there is a job. But, you can’t go to work there
2) Seasonal Unemployment
Because some do not produce continuous throughout the year such as planting rice, construction, etc. may be done only 6 months or construction may be less in the rainy season. When planting these pages or construction can result in unemployment was seasonal.
3) Structural Unemployment
Arise from the fact that migrants are less able to adapt to keep pace with changing economic structure may be due to the advancement of technology. For example, manufacturers turned to machinery or equipment energy-saving substitute labor of men, such as weaving factory machines instead of weaving with hand Soft drink bottling factory using machinery instead of labor.
4) Cyclical Unemployment
5) Disguised Unemployment
Usually occurs in crowded communities or systems of work in agriculture. The people there were more than necessary.
4. The problem of unemployment.
1) Solving the unemployment problem temporarily.
- Information services for workers and employers.
- Provide labor market
2) Solving problems of seasonal unemployment.
- Farmers encouraged to working otherwise. When planting out of season. Or the government is trying to create jobs in rural areas.
3) The problem of unemployment due to changes in economic structure.
- Training workers to have knowledge and ability.
- Extra time from the machine. Or energy-saving tool is not necessary.
4) Monetary policy
5) Fiscal policy
6) Educational policy
- Structured to suit the structure of our economy.
12. Relationship between inflation and unemployment.
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