Four Stages Of The Economic Cycle

The economic cycle is the wavering of the economy during the periods of expansion and contraction. The four stages of the economic cycle are expansion, peak, contraction and trough. The expansion is the growth stage, the peak stage is the stage when the economy is at its highest, the contraction stage is the recession stage, and the trough is the stage of recovery. We are currently in the expansion phase, which is also known as the growth stage of the economic cycle. Our economy has been growing since our last recession that started in 2007 and ended in 2009. The graph below shows the current economic cycle of the U.S. Fiscal policy is the government adjustment of their spending limits and tax rates in order to influence the economy. There …show more content…
In the United States the Federal Reserve is in charge of monetary policy. The Federal Reserve maintain monetary policy by revising the interest rate, modifying the quantity of money the banks are required to keep in their vault. Interest rates are the most affected by monetary policy. Similar to fiscal policy, monetary policy has two types as well, which are expansionary and contractionary. In expansionary monetary policy the money supply rises in pursuit to decrease unemployment, increase consumer spending, increase private sector borrowing, and to fuel economic growth. In contractionary monetary policy the money supply decreases in order to gain control over inflation. Contractionary monetary policy also runs the risk of slowing down the economic growth, decreasing private sector borrowing, lowering consumer spending, and increasing unemployment. Expansionary monetary policy causes national currency exchange rate to decrease. When the national currency exchange rate is weakened this now causes the balance on capital account to increase. Restrictive monetary policy causes the national currency exchange rate to increase. These are both caused by the income effect of monetary …show more content…
Demand Exxon Mobil Corporation is in the industry of Oil and Gas. There is a strong demand for oil and gas all around the world. We used oil and gas in our everyday lives whether we are driving our vehicles, heating our homes, or even cooking our food. Oil and gas also provides the nation with a vast majority of its energy. With Oil and Gas being one of our largest industries, the global economy simply could not function with out it. The Oil and gas industry could be described as cyclical. The industry of Oil and Gas experiences many up and downs. The economic conditions are the key driver of demand in the Oil and Gas industry. If the economy is performing poorly the demand for oil and gas will decrease and if the economy is doing well the demand will increase. The supply and demand affects the price of oil and gas. If the demand is higher than the supply than the price will increase. The price of oil and gas also increase around holiday time do to the many motorists on the road traveling. Gas and Oil prices have a direct influence on the Gross Domestic Product growth. The lower oil and gas price causes GDP to increase.
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