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Unit 1 P5 M2

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Business cycle
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 in China accelerated in november, as economic growth picked up and food prices rose. Chinese consumers paid 2% more for good and services in november then they did a year ago, the government's national bureau statistics reported on a Sunday. While that up from a 1.7% annual increase in october, it nevertheless represents tame inflation for the world's second largest economy. A year ago the country was experiencing an annual inflation rate at 4%. the Chinese government prefers to keep its annual inflation rate below 4%- a level it seems as consistent with health economic growth and consumer demand. The inflation rate averaged 4.23 percent reaching an all time high of 27.70 percent in october of 1994 and a record low of -2.20 percent in march of 1999. in china the most important components of the CPI basket are food at 31.8 percent of total weight and residence at 17.2 percent. Recreation, education and culture articles account for 13.8 percent; transportation and communication for 10 percent, healthcare and personal articles at 9.6 percent, clothing at 8.5 percent; household facilities, articles and services for 5.6 percent; tobacco liquor and articles for the remaining 3.5 percent. The CPI basket is reviewed every five years on the basis of household surveys. Revisions reflect new spending patterns and economic development, according to the nation bureau of statistics.

Interest rates (UK): historically, from 1971 until

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