Analysis of the Business Cycle – The Beauty Salons
By
Jacqueline R. Jones
Presented To
Dr. Saad M. Khalil
December 5, 2010
ECO550009016: Managerial Economics and Globalization
Strayer University

Abstract

The scope of this paper is to investigate, prove or disprove the implications that due to our current economic status for the past twelve months our GDP (Gross Domestic Product) growth, inflation, unemployment, corporate profits and other data has played a relevant part on where our economy currently is in the business cycle today. It implies that these factors may play a significant part on our prospective for higher sales, labor cost and growth from a monopolistically competitive firm or industry. Various official U.S. sources on statistics have been complied and examined as well as information from numerous websites and articles and have been studied to see if these analysis are founded for today’s economy. Studies from the Labor Statics, the Bureau of Economic Analysis and the Federal Reserve Board have conducted, similar aspects on the business cycle pertaining to GDP growth, inflation, unemployment and corporate profits about the business cycle. We will also look at the of a monopolistically competitive firm (beauty salons) to see if they will experience growth when unemployment is low or what will happen when higher employment effect a downturn in the business cycle.

According to the Burea of Economic Analysis the GDP (Gross Domestic Product) from 2008 to 2010, personal consumption to government consumption expenditures has fluctuated from 0.8% to 1.6% starting with real gross domestic product 0.7% to 2.4%, gross private domestic investment 9.4% to 28.8%, exports 5.7% to 10.3%, government consumption expenditures 2.3% to 4.4% and gross domestic product current dollars 1 to 4.3. These changes occurred from 2008 to present,