Win - SBD - Contest # 1 (Part 2)

monajam (70) in contest • 7 years ago

Business cycle refers to the movements or fluctuations in the economic activities such as trade and production. The movements can be upward or downward; that is, there are periods of expansion and contraction in the levels of economic activity. Thus, there is a wave-like pattern in the business cycle. It expands, and leads to a peak and then it contracts and leads to a trough. Thus, the business cycle consists of four phases. Peak is the point of high activity and trough is the point of low activity. It can be well represented by the following diagram.

Expansion phase includes recovery and prosperity. During the recovery period, the economy recovers itself; the existing opportunities are expanded and new created; various improvements are made to improve the economy.

Thus, about the future of the economic growth and development there is an ever-increasing optimism during the recovery period.

This optimism is manifested in investing the capital in industries and machineries, employing more labor, and in the need of wanting more materials to facilitate this. All related industries are equally expanded. For example, with the expansion of automobiles industries, other industries of glass, steel, and rubber etc. are also expanded. Moreover, cement and machinery industries are also expanded because more roads are needed for automobiles. This demand for labor and material results in the prosperity of the workers and the suppliers. This prosperity period may continue to rise until it reaches a peak, and this ends the expansion phase.

Below are given six statements. Your task is to identify the statement that best describes the author’s thoughts about the passage.

Industrial expansion does not affect luxury goods like jewelry.
Prosperity can only be attained with the creation of innovative products.
After every expansion, recession follows and it is a normal process.
Recession results when the customers lose their confidence in the market.
Long-lasting and permanent prosperity can be attained with sound economic decisions and policies.
Recession results when a company or group of companies fail in what they promised to deliver.

How to participate in the contest?

Upvote this post.
Leave your answer in the comments and explain why did you choose this answer..

All SBD made from this post will be awarded to the participant who chooses the correct answer at the end of the payout period. If there are more than 1 winners, the SBD will be distributed equally among them.

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7 years ago by monajam (70)

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spikedgiraffe (36) · 7 years ago (edited)

After every expansion, recession follows and it is a normal process.

While all Answers could be correct I feel that this one best fits your personal opinion. Out of the possible answers this seems also to be the most correct over all since while reading the options I thought of arguments against the statement.

Time has proven this to be the only one to be true.

We know for a fact that Industrial expansion absolutely impacts Luxury goods. It makes them more available to the common person. Previously things that were only for the rich, like cars, are now for everyone. I also think about Diamond Mining in how innovation has made them easier to acquire. Then we have outside forces manipulating that market keeping the prices up.
Prosperity is subjective. What one will find to be prosperous will not be what another finds to be so. Events in recent days and months in the USA and around the world are making me personally rethink what being prosperous really means, and in my opinion Money and Power have nothing to do with it.
Recession can happen even if the Consumers have total faith in the market. This has been proven so many times, and we keep forgetting. The 2008 House Bubble, it wasn’t the consumers; those buying mortgages that lost confidence; it was unscrupulous mortgage lenders banking practices that caused that. People were still buying property, just not those that realistically could not afford it.

Then 2015 Oil Crash. This hit me personally VERY hard. I am in Alberta Canada, when Oil went from over $100US a barrel to under $35US things were utter Chaos. What bad timing to call an election. We have been in recession since 2015, and it is not because anyone has lost confidence in Oil(it has so many uses)…it has everything to do with World Demand. Oil is the Coal of today. Coal ran the Energy Source of the world, Now It is Oil. We are one the Cusp of something new.

Imagine the Chaos and Recession, possible depression that could happen if a government is not a head of the game and it’s citizen embrace Bitcoin and Cryptocurrencies? Governments will Fall, and our western countries are at the worst risk of it.

As for Long-Last and Permanent Prosoperity…Impossible. The only way to make that happen would be to eliminate all change in the world, and that will never happen. Even if could account for all human nature, MOTHER NATURE does not have to play ball. I look at my home province of Alberta Canada and the Fort MacMurray Fires…the ENTIRE CITY evacuated!! (And heavens thank you no one died in that fire, not a single death due to the fire!) British Columbia is on Fire now. I remember July 31, 1987 Edmonton Alberta…BLACK FRIDAY. First ever suspected F5 Tornado ripped up the East side of the City, not that far from where we lived. (We never Know what life has in store for us or those around us, we can only do the best we can with what we have and try to do better. No one lies on there death bed wishing they spent more time at work)

Other than the idea that some Companies are TO BIG TO FAIL(if they are to big to fail, then they should fail/split up) where having to many eggs in one basket is a bad thing. No 1 company or even group of companies failing to deliver their products or services should cause a Recession. In a healthy vibrant economy there are many options for the same service and product that when one does fail there are others to pick up the business. Businesses rise up and fall all the time, it is perfectly normal in Capitalist Economy.

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2 votes

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spikedgiraffe (36) · 7 years ago

Wow, I wrote a small essay there. Please don’t grade me on that, lol.

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1 vote

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monajam (70) · 7 years ago

At least, I can upvote your comment :) Really nice.

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1 vote

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leocadia (25) · 7 years ago

I forgot to give my answer in time last contest so I will give it more promptly this time.

My choice is nr. 3: After every expansion, recession follows and it is a normal process.

Since this economic theory is one of rolling waves. One period is a low and another is a high with two in between ones when the economy either scales down or rises up again.
The author does seem to thinks this is a natural process and the way the economy functions in most countries.

Plus the other 5 statements doesn't quite feel right for some reason - at least to me they don't.

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ash987 (32) · 7 years ago

Upvoted, resteemed and followed !

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ilvstranger (51) · 7 years ago

\2. Prosperity can only be attained with the creation of innovative products.

and a bit from 3. But not recession. It should be normalized times.

To reach new prosper times, innovation is always needed. To improve old things that are obsolete for lot of new world needs.
If we would still use in these days 50 years ago technology we'll wont be able to do what we do today when speed is the first thing that matters.

i'm still here, nice to see you so devoted also
:-)

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monajam (70) · 7 years ago

Hey, please give answer 'to-the-point' . Tell clearly which option do you think is correct? 2 or 3?

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ilvstranger (51) · 7 years ago

\2. Prosperity can only be attained with the creation of innovative products.

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jero1 (37) · 7 years ago

upvoted

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satyamsoni (49) · 7 years ago

It's three....
Becuase according to authors thought - the author trying to explains about the recovery process after the contraction and trough phase. Then in the end author says ,"This prosperity period may continue to rise until it reaches a peak, and this ends the expansion phase."
Thatsby i choose,"three"
Ie. After every expansion, recession follows and it is a normal process.

I think i have gave a nice explanation of my answer. Waiting for my prize.😊😊😊

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