Question

1) Nike has decided not to allow retailers like Foot Locker to open at midnight when they release a popular new shoe. Midnight releases have led to riots outside stores in the past. What is Nike concerned about here?

2) What is the phase of the business cycle when an economy is coming out of a recession or depression?

Answer 1

1. Give give some more details on question.

2. Recession phase of business cycle:

Cyclical Unemployment; turning point from prosperity to depression is termed as Recession Phase.

During a recession period, the economic activities slow down. When demand starts falling, the overproduction and future investment plans are also given up. There is a steady decline in the output, income, employment, prices and profits. The businessmen lose confidence and become pessimistic (Negative). It reduces investment. The banks and the people try to get greater liquidity, so credit also contracts. Expansion of business stops, stock market falls. Orders are cancelled and people start losing their jobs. The increase in unemployment causes a sharp decline in income and aggregate demand. Generally, recession lasts for a short period.