Economic impact that small businesses have on the United States.
Understanding World Markets and the Risk Associated with Small Business Ownership
Look at the economic impact that small businesses have on the United States and the people
that live in various communities, as well as other countries in this global environment.
According to your textbook, a nation’s economy tends to flow through various stages of a business cycle:
prosperity, recession, depression, and recovery. If we look at the United States economy over the past 7 years,
it has cycled through a time of recession, into a period of recovery. and is due to cycle into prosperity.
What you will find during each business cycle is that business decisions and consumer buying patterns
change. The authors of your text state, “In periods of economic prosperity, unemployment remains low,
consumer confidence about the future leads to more purchases, and businesses expand – by hiring more
employees, investing in new technology, and making similar purchases – to take advantage of new
In a recession, a cyclical economic contraction that lasts for six months or longer – “consumers frequently
postpone major purchases and shift buying patterns toward basic, functional products carrying low prices.
Businesses mirror these changes in the marketplace by slowing production, postponing expansion plans,
reducing inventories, and often cutting the size of their workforces.”
In the recovery stage of the business cycle, “the economy emerges from recession and consumer spending
picks up steam. Even though businesses often continue to rely on part-time and other temporary workers
during the early stage of recovery, unemployment begins to decline as business activity accelerates and firms
seek additional workers to meet the growing production needs.”
Let’s bring these economic concepts into the area in which you live. We want you to be able to explain how the
economy has been influenced by the national and global economy. What did this economic turn do to local
businesses and people? How does the description from the textbook of what happens to business decisions
and consumers during this period compare to what you have observed in your own life?
First conduct a little research into one of the following areas.
Emerging markets in the Dayton Metropolitan Area
The impact of Tech Town in Dayton
The collaboration of businesses in Dayton
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