Question

on the topic of the macroeconomic business cycle, how government policies and business strategies are used to combat the cycle (government) and how to compete successfully (business)

Answer 1

Variations in a country's monetary policies, autonomous of changes prompted by political pressures, are an essential influence in business cycles . Utilization of fiscal strategy—increased governmental spending &/or tax cuts—is the most usual method of boosting AD, causing an economic expansion.

Whilst there’s no definitive formula for all firms, the approaches usually emphasize a long run view focused on the firm's core strengths & stressing the requirement to plan with more discretion always. Basically, attempts are made to adjust a firm’s functions in a way that it keeps an even keel thru the ups & the downs of a business cycle.

Some tips for managing business downturns are-

• Flexibility : Having a flexible corporate plan enables for development times which span the complete cycle & incorporates various depression -resistant funding arrangements.
• Long run Planning :Experts persuade small enterprises to embrace a modest stance in their long-range forecasting.
• Attention to Consumers: This can be an specially essential factor for firms seeking to emerge from a downturn. Keeping close relationships & open communication with consumers is a difficult discipline to sustain in good periods, but it is specially vital coming out of bad periods. Consumers are the best indications of when a firm is likely to start recovering from a slowdown.
• Objectivity: Small enterprise owners must keep a high level of objectivity whilst trotting business cycles. Operational decisions based upon desires/hopes rather than a serious examination of the realities can devastate a firm.
• Study: Timing any act for an upturn is complex. The aftermaths of getting the timing incorrect, of being early / late, can be dangerous. How, then, does a firm strike the correct balance between being early / late? Listening to politicians, economists and media to obtain a sense of what’s occurring is helpful.