An Uncertain Future?

An Uncertain Future?

Uncertainty: Means that a range of possible future outcomes exists, but we don't know which one will actually happen.

Risk: Requires knowing the probability of each of the possible outcomes and the impacts of each one.

Risk averse: Reluctant to take chances and inclined to "play safe"

Economic Cycle:

  • The tendency of national or global economic activity to fluctuate between upswing, boom, downturn and recession.(


  • Gross Domestic Product.
  • main measure of national income
  • It is the market value of the goods and services produced in a country in a given time period

State of Economy:


  • A time of rapid economic growth
  • low unemployment
  • Rising inflation
  • Increased consumption
  • Increased consumer confidence


  • Consumers are less confident= Fall in aggregate demand, as they spend less
  • When sales are slow, businesses will cut output
  • In 2008, the downturn came when mortgages were hard to obtain, cutting demand for housing, which had a knock on effect for the construction industry.


  • 2 or more successive quarters in the economic cycle in which GDP is falling
  • Firms will cut output
  • Cause uncertainty for the business
  • Depreciation of machinery


  • Depreciation will eventually lead to businesses investing in new machinery
  • Governments can also have positive impacts
  • Technological breakthrough
  • Rise in…


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