A dynamic economy refers to a kind of economy that is constantly changing within a given period of time, with the change being in reference to a given point in time. The change in a dynamic economy is mostly uncertain, irregular and unexpected. There are various phases that occur in a dynamic economy which have drastic effects on any participants in the economy.
For parties operation in a dynamic economy, they experience the business cycle. A business cycle refers to a number of economic ups and economic downs that affect a business.
There are 4 phases in a business cycle. These are boom (peak), recession, depression (trough) and recovery.
During the boom phase, business is very good. There is high output as well as high customer demand for the products of the business.it is important to do vigorous marketing during this phase. This is so as to sustain a portion of the market demand during other phases where demand may be somewhat lower. Because there is high business, there is a higher need for workers. During this phase, there is a higher employment rate. Due to the high profits made during this phase, the wage rate is also high.
The living standards of employees and their families are higher. Higher revenue means higher taxes for the government. This results in better provision of public utilities and services. The population in a country increases during this phase because of better healthcare and free services provided by the government.
As this boom phase slowly wears off, the recession phase creeps in. At this phase, the demand of a business’ products is slowly declining. This reduction in demand means that the quantity of product that will be produced will be reduced. This consecutively affects the labor that will be required in a business. Workers ill slowly be laid off and wage rate will reduce due to reduction in profits in the business.
The living standards of people in such an economy will start to go down. The government will not collect as much tax as it was collecting before and therefore it will not be able to provide as many public utilities and services as before.
With time, the third phase of this business cycle occurs. This is known as the depression phase, or the trough. The quantity of product demanded in such phase is continually declining and so is their production. Less people will be employed. Living standards of the citizens of a country continue to decline drastically and the government can barely assist. At this point online marketing is important as it costs less and it may attract customers who are necessary to keep the business going during this phase.
The recovery phase then steps in. there is a notable increase in the quantity of goods of a business that are demanded. As the quantity of products demanded increases, the need for their production also goes up. Therefore, the employment rate goes up and so does the living standards of the people in an economy. The tax collected by the government slowly increases and so it is able to cater for the health needs of its citizens.
In conclusion, it is important to know what to expect in certain phases of a dynamic economy. It is also crucial to know what steps to take so as to ensure survival of a business as well as other participants in an economy during such phases like making an effort to make more of your products and services visible to everyone by means of online visibility, there are a lot of SEO companies who can help you, Youth Noise can handle that, try to visit their website.