Unit 1 P5 M2 Essay
Boom: - during the boom stage of the business cycle the economy is performing its best. Demand, production and sales figures are high. To meet the high levels of demand and production the business has to create new jobs; by doing this the percentage of the nation has money to spend on goods and services. However as businesses produce greater profits higher wages can be paid to employees growing their disposable income. People& businesses in the economy are allowed to spend money as there is a great business available for them.
Recession: - customers continue to spend but overall load fall and product services become more costly. As a result to this businesses are strained to reduce the prices of their items to generate …show more content…
Inflation: the rate of inflation in the UK slowed last month, the consumer price index (CPI) fell to 2.2% in September from 2.5% in August. The inflation rate in the united kingdom is reported by the UK office for national statistics. Historically, from 1989 until 2012 the united kingdom inflation rate averaged to 2.8 percent reaching an all time high of 8.5 percent in April of 1991 and a record low of 0.5 percent in may of 2000. in the United Kingdom, the most important categories in the consumer price index are transport (16.2 percent of the total weight) and housing, water, electricity, gas and other fuels (14.4 percent). Recreation and culture accounts for 13.4 percent, restaurants and hotels for 11.4 percent and food and non alcoholic beverages for 11.2 percent. The index also includes; miscellaneous goods and services at 9.6 percent; clothing and footwear at 6.5 percent; furniture, household equipment and maintenance at 6.1 percent. Alcoholic beverages and tobacco health,