Question

Briefly discuss the performance of the following industries along the economic cycle.

(a) Motor vehicle parts

(b) Department stores

Answer 1

ECONOMIC CYCLE -

economic cycle refers to a situation where different phases of economic prevails-

1. stability
2. recession
3. depression
4. recovery
5. stability
6. boom

as detailed in the diagram

now coming to the question -

performance of motor vehicle parts-

motor vehicle parts are concerned with automobile sectors therefore its a kind of complementary good to it. therefore when the demand and usage of motor van is at its peak then the demand for the parts of motor van would also be high and in boom period due to increase inflation there would be an increase in the demand of goods concerned with the motor van parts.

but during the period of recession and depression the performance of this sector is recorded worst as per the past and present scenario.

in the recent COVID - 19 pandemic a leading manufacturing company of car MARUTI in India reported in the beginning of may that it had not sold even one single car during this financial year therefore it can be concluded easily that the demand for the spare parts of the car is also declined.

performance of DEPARTMENTAL STORE- departmental store generally deals with the grocery and essential items like edibles , beverages etc.

therefore the elasticity is generally zero or very less . therefore this sector is termed as ever green sector . it remains normal during the boom and stable phase and doesn't get worse effected in even recession and depression period.

during the current pandemic situation the FMCG sector was the least affected sector.