1 Principles of Economics Student’s Name Institution Professor Date 2 How would economic fluctuations affect the sale of smartphones? One of the most significant elements influencing a consumer's decision to buy a specific product or brand is price. As per the Law of Demand, as the price of a commodity rises, so does the necessity for it (Taussig, 2013). “The price of an invention or provision is the total of the values that consumer’s trade for the advantages of possessing or exploiting the merchandise or service.” When the economic fluctuations are on the positive side, the sale of smartphones will rise, while when the economic fluctuation goes downwards, this will trigger a fall in demand for smartphones due to monetary issues. The customers will tend to go for the cheaper options or substitutes, leading to a fall in sales of smartphones. Please define the four phases of the business cycle that affect economic fluctuations. According to the term "business cycle," which is often referred to as the "economic cycle" or the "boom-bust cycle," economic activity in the economy fluctuates from year to year. As measured by GDP (gross domestic product) levels, the business cycle corresponds to growth and contractions in economic activity (business swings). Business cycles include four distinct stages: expansion, peak, contraction, and trough. An expansion is defined by higher productivity, economic development, and an increasing price burden. A cycle's peak occurs when ...
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