DEPARTMENT OF TECHNICAL

EDUCATION ANDHRA PRADESH

Name : R. Mohan
Designation : Head of CCP Section
Branch : DCCP
Institution : G.M.R Polytechnic, Gajwel,
Medak (Dist.)
Year/Semester : VI Semester
Subject : Business Economics-II
Subject Code : CCP-602
Topic : Trade Cycles
Duration : 50 minutes.
Sub-topic : Phases of Trade cycles-Recovery
Teaching Aids : PPT, Animations
CCP602.48 1
Objectives:

On completion of this period you will be able

to know :

 Phases of Trade cycle - Recovery

CCP602.48 2
Recap:

We have learnt in the previous class

Phases of Trade cycles

 Prosperity
Recession
Depression

CCP602.48 3
Fourth Phase – Recovery

 It is a lower turning point

 The economy undergoes changes from depression
to prosperity
 Depression is not a permanent feature of an
economy
 The forces which cause depression are
themselves self defeating

CCP602.48 4
 Contd.,

 During depression the businessmen who

postponed the replacement of capital assets will
slowly replace now
 The demand for capital goods will slowly increase
 This will lead to new investments
 This causes a rise in employment level

CCP602.48 5
 Contd.,

 Income level of the community will rise

 Increase in consumption expenditure
 Increase in effective demand
 Increase in prices
 Increase in profits
 Will revive the economy

CCP602.48 6
 Contd.,

 Expansion starts and gains momentum

 In the stock markets the prices of stocks rise
 Business pessimism will slowly give place to
business optimism
 Recovery will lead to prosperity

Thus one cycle is completed

CCP602.48 7
Summary:

 Revival is a turning point from depression to

prosperity. During this period the economy will be
slowly revived leading to prosperity

CCP602.48 8
Frequently Asked Questions

2. Explain the recovery stage in the Trade cycle.

3. Explain the stages of Trade cycle.

CCP602.48 9