The business cycle is made up of four stages: expansion, peak, contraction, and trough. Each stage affects how people shop and spend their money differently.
In the expansion stage, the economy is on the rise. More jobs are available, and people feel good about their financial situation. Because of this, they tend to spend more money.
At the peak, the economy is at its highest point, but signs that it might slow down start to appear. Even though people are still spending, they may become more careful with their money.
During contraction, also known as a recession, people become less confident. They start cutting back on spending and focus on buying only the essentials.
List of Reactions:
Example: Think of a family that skips their yearly vacation to save money when they hear there might be layoffs at work.
In the trough stage, the economy is at its lowest point. Consumers are very careful, only buying what they really need. They look for sales and discounts more than ever.
By understanding how consumers react during these stages, we can better understand how the economy works and predict changes in shopping habits. Each stage is important because people's spending patterns change based on how they feel about the economy.
The business cycle is made up of four stages: expansion, peak, contraction, and trough. Each stage affects how people shop and spend their money differently.
In the expansion stage, the economy is on the rise. More jobs are available, and people feel good about their financial situation. Because of this, they tend to spend more money.
At the peak, the economy is at its highest point, but signs that it might slow down start to appear. Even though people are still spending, they may become more careful with their money.
During contraction, also known as a recession, people become less confident. They start cutting back on spending and focus on buying only the essentials.
List of Reactions:
Example: Think of a family that skips their yearly vacation to save money when they hear there might be layoffs at work.
In the trough stage, the economy is at its lowest point. Consumers are very careful, only buying what they really need. They look for sales and discounts more than ever.
By understanding how consumers react during these stages, we can better understand how the economy works and predict changes in shopping habits. Each stage is important because people's spending patterns change based on how they feel about the economy.