Economic Growth and Recession

Study Notes

Economic growth occurs when national income increases from one year to the next.
Economic recession occurs when national income decreases from one year to the next, and economic decline is a severe case of recession.
An economic cycle consists of several years of economic growth followed by economic recession.
Government economic policy aims to achieve continued economic growth, and if recession becomes unavoidable, policy is aimed at making the recession as short and minor as possible.
Business managers need to be aware of the stage of the economic cycle to make effective business strategies.

The stock market is a leading indicator of where the economy will be in the near future.
The performance of a stock market is measured through a stock market index.
Stock market indices reflect investors' confidence in the capital market, providing a basis for the flow of capital for businesses.
A high stock market index reflects potentially positive business prospects.

Communism advocates for change through any means, including violence, and aims to achieve economic equality and social service.
Conservatism tends to suppress and oppress, and aims to achieve national interest over international cooperation.
Fascist capitalism is characterized by power politics and the attainment of national interest over international cooperation.

Trade associations are coalitions of business organizations in the same or related industries that work together to promote common interests.
Examples of trade associations include the Federation of Pakistani Chambers of Commerce & Industry, Overseas Investors Chambers of Commerce and Industry (OICCI), American Business Council (ABC), All Pakistan Textile Manufacturers Association (APTMA), and Pakistan Automotive Manufacturers Association (PAMA).
These associations represent numerous businesses with millions of trade potential and include businesses of all sizes, sectors, and regions.

Cyber laws apply to internet and internet-related transactions and aim to safeguard individual information and confidentiality of clients.
Competition law encourages fair competition in markets and avoids anti-competitive practices.
Monopoly laws prevent a company from acquiring monopoly control over a market and aim to prevent unfair business practices such as charging higher prices.