Level 3 BTEC National Business
Unit 1 The Business Environment
Business in Two Economic Environments

A recession is the period when the economy is in decline for two consecutive quarters(six months) which means there has been a double dip of GDP in the economic cycle. Many if not all businesses are affected by a recession and the impact of it varies depending on how a business deals with it and the strategies put in place to make sure the negative impact is kept minimal. http://www.businessdictionary.com/definition/recession.html#ixzz3m1jzJiCk In a recession, the inflation levels begin to decrease as there is a lack on spending in the economy. Inflation usually rises as more people spend more and when the demand for products and services is high, however as people stop spending due to a recession, the inflation is bound to go down. Employment is scarce in a recession and therefore it is extremely difficult to find a job which means that Unemployment levels will be high. The reason for large Unemployment levels in a recession is that employers do not need to employee a large number of staff as the demand for their services is low and therefore in order to make a larger profit, organisations tend to employ less staff. Disposable income is the income left over to spend and save after the deduction of income taxes. Therefore it is the disposable income that is usually used to work out the state of the economy. During a recession, income usually decreases as businesses and organisation begin to make less profit and are unable to pay all their employees high wages. Therefore it decreases which in creates a bad morale within a workplace.http://www.investopedia.com/terms/d/disposableincome.asp

Le Crepe will begin to see a decrease in number of customers as the recession begins to hit the economy because less people will be able to afford to buy their products