ACC 497 Case Study 1-49 free essay sample

An audit by the IRS was done on Mr. John Gemstone, a wealthy client. A few deductions were questioned, such as; $10,000 loss on beach rental, $20,000 charitable contribution, $15,000 loss for operation of cattle breeding ranch. There was a concern that the battle breeding ranch is not a legitimate business, which is more like a hobby. My supervisor was asked that I represent Mr. Gemstone in his discussions with the IRS. In order to get elaborate more on Mr. Gemstones deductions, we would need more specifics: †¢For the charitable contribution painting, we feel that the painting may be overvalued. Was there an expert that actually came out and viewed the painting to give a professional and honest value of $20,000? Where is the proof? Can we go based on your word? If I said, the Mona Lisa painting was $1; would you believe that in fact the painting is valued at $1? What record do you have to provide to us that the painting is valued at ,000? †¢Now, Mr. We will write a custom essay sample on ACC 497 Case Study 1-49 or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Gemstone claims that he has a business of cattle breeding. Are you registered as an individual to be breeding cattle? Where are you documents for your land that you are in fact breeding these cattle on your property? How are you keeping track of the money that you have invested and the revenue coming in from breeding these cattle? Do you have a permit showing that these cattle can be breed on your property? †¢In the loss deduction of the rental of your beach cottage? What happened with the beach cottage? What do you have to prove that this can be included in your tax return? Tax research is the search for the best defensibly correct solution to a problem involving either a completed transaction or a proposed transaction, according to Federal Taxation (2011). We must determine the following: †¢Determine the facts †¢Identify the issues †¢Identify and Analyze the tax law sources †¢Evaluate non-tax implications †¢Solve the problem †¢Then communicate the findings with the client. In Mr. Gemstones case, stated in Section 280A, a loss is not a deductible if the taxpayer used the residence, such as the beach house, for personal purposes for longer or greater of 14 days or 10% of the number of days the unit was rented at a fair rental value. Property is deemed to be used by the taxpayer for personal purposes on any days on which it is definition of family members. According to the IRS, an individual can deduct a charitable contribution made to, or for the use of, any of the following organizations that otherwise are qualified under section 170(c) of the IRS codes. However, there are limitations of deductions. The 50% limitations apply to all public charities, all private operating foundations (code POF), certain private foundations that distribute the contributions they receive to public charities and private operations foundations within 2 ? months following the year receipt and lastly to certain private foundations the contributions to which are pooled in a common fund and the income and corpus of which are paid to public charities.

Free Essays on Vicenente Aleixandre

like lips in, 1932, Pasà ­on de la Tierra which is Passion for the Earth in 1935 and La Destruccià ³n o el amor which is Destruction of Love, in 1935. However, it is with Aleixan... Free Essays on Vicenente Aleixandre Free Essays on Vicenente Aleixandre Vicente Aleixandre Spainish Poet Aleixandre is one of the most successful Spanish poets to both survive the Civil War and remain in Spain afterwards. A large part of this is due to the fact that his poems were non- political in nature. Aleixandre had a long-suffering struggle with tubercular nephritis, which kept him bed-ridden in a mountain retreat for much of the war. Aleixandre's significant contributions to modern poetry were recognized with the receipt of the Nobel Prize for Literature in 1977, He was 79 years old! Vicente Aleixandre was born in Seville, in 1898. He led a happy childhood. His father was an engineer, and the family was very close-knit. In fact, following their parents deaths, His moms in 1934 and his father in1940, both Vicente and his sister, Conchita, continued to live together in their parent's house. The family moved to Mlaga in 1902, and this scenic, coastal village proved to be a strong inspiration to Aleixandre's early poetry. He often evoked images of the sea and sun. However, he was late in developing as a poet. In college, Aleixandre studied business law and became a University law teacher in Madrid when he was only 22 years old. It was not until a close friend and poet, Dmaso Alonso, gave him a book of poetry by Rubà ©n Darà ­o, that he began writing in secret. Aleixandre did not devote himself to his hidden passion, until his illness forced him to leave his job at the age of 27. His early publications were well regarded and Vicente Aleixandre was rewarded Spain's National Prize for Literature in 1933 for his first four publications: mbito in english it is Ambit in Swords like lips in 1928, Espadas como labios which in english is Swords like lips in, 1932, Pasà ­on de la Tierra which is Passion for the Earth in 1935 and La Destruccià ³n o el amor which is Destruction of Love, in 1935. However, it is with Aleixan...

Identify Problems and Solutions Bulling in Schools Essay

Identify Problems and Solutions Bulling in Schools - Essay Example This essay approves that the effects of bullying can be both short and long-term, with some psychological scars often enduring for years (Lumsden, 2002). Pre-school children, not yet able to properly voice their concerns, will display symptoms that can be attributed as the effects of being bullied. These symptoms can include refusing to go to school, refusal to discuss how the day went and feigning illness. Crying for no apparent reason and reluctance to go certain places are also common effects. Between the ages of seven and sixteen years old, the symptoms and effects of bullying become easy to identify. While children this age are perfectly able to articulate themselves, sometimes they can decide to not to, because they are shamed, scared or fear further punishment. The huge fear and inner soreness that bullying causes can sporadically activate a violent and sudden outburst in sufferers when they get to their ‘hot point’ and just cannot take the agony any more. The suf ferer may get dejected, depressed, and suicidal or even murderous. This report makes a conclusion that research has also shown that students are reluctant to bring their concerns to the attention of teachers. In effort to combat this, a more organized approach needs to be taken among teachers when handling school bullying. If there is not a current approach to bullying existing in a school, teachers will continue to have varying responses to handling bullying situations, based on their self-efficacy, intent, and empathy toward the victim. Teacher assessments need be given, and programs need to be developed to enhance teacher self-efficacy and knowledge about bullying.

The Science of Nutrition Essay Example | Topics and Well Written Essays - 2250 words

The Science of Nutrition - Essay Example Describe the processes involved in cellular protein synthesis. How would synthesis be affected by intake of an otherwise adequate diet that is very low in glycine or low in tryptophan How would synthesis be affected by a diet that is low in energy Proteins are widely used in cells to provide different functions such as providing structural support for cells or to act as enzymes to catalyze certain reactions. Since the beginning of evolution, cells have developed the ability to synthesize proteins. To manufacture proteins, cells follow a very systematic procedure that first transcribes DNA into mRNA and then translates the mRNA into chains of amino acids. The amino acid chain then folds into specific proteins. [11] These two processes are 1. DNA Transcription Protein synthesis initiates in the cell's nucleus when the gene encoding a protein is copied into RNA. Genes, in the form of DNA, are rooted in the cell's chromosomes. The process of transferring the gene's DNA into RNA is called transcription. Transcription helps to increase the amount of DNA by creating many copies of RNA that can act as the template for protein synthesis. The RNA copy of the gene is called the mRNA. After transcription, the mRNA is transported out of the cell's nucleus through nuclear pores to go to the site of translation, the rough endoplasmic reticulum. [4] 2. RNA Translation After the mRNA has been taken to the rough endoplasmic reticulum, it is fed into the ribosomal translation machineries. Ribosomes begin to read the mRNA sequence to convert the mRNA into protein. The mRNA sequence is matched three nucleotides at a time to a complementary set of three nucleotides in the anticodon region of the corresponding tRNA molecule.... As the essay declares proteins are widely used in cells to provide different functions such as providing structural support for cells or to act as enzymes to catalyze certain reactions. Since the beginning of evolution, cells have developed the ability to synthesize proteins. To manufacture proteins, cells follow a very systematic procedure that first transcribes DNA into mRNA and then translates the mRNA into chains of amino acids. The amino acid chain then folds into specific proteins. According to the report findings protein synthesis initiates in the cell's nucleus when the gene encoding a protein is copied into RNA. Genes, in the form of DNA, are rooted in the cell's chromosomes. The process of transferring the gene's DNA into RNA is called transcription. Transcription helps to increase the amount of DNA by creating many copies of RNA that can act as the template for protein synthesis. The RNA copy of the gene is called the mRNA. After transcription, the mRNA is transported out of the cell's nucleus through nuclear pores to go to the site of translation, the rough endoplasmic reticulum. After the mRNA has been taken to the rough endoplasmic reticulum, it is fed into the ribosomal translation machineries. Ribosomes begin to read the mRNA sequence to convert the mRNA into protein. The mRNA sequence is matched three nucleotides at a time to a complementary set of three nucleotides in the anticodon region of the corresponding tRNA molecule.

Windows Server Deployment Proposal Rubric Paper Research

Windows Server Deployment Rubric Paper - Research Proposal Example The answer to this question is simple and straightforward. By creating VLAN it is possible to create smaller broadcast domains within layer 2 switched internetworks by assigning different ports on the switch to different sub networks. A VLAN is treated like its own subnet or broadcast domain, meaning that frames broadcast onto the network are only switched between the ports logically grouped within the same VLAN. A router is also needed in this network for inter-VLAN communication. VLAN Trunk Protocol (VTP) is also useful in updating the databases of the switch with the VLAN information and on how trunking is applicable sending information from all VLANs across one link. Thus VLAN helps in the network management in the following aspects Before the new network was established IDLEWILD had the Wide Area Network. The network of IDLEWILD is was put up with the WAN links to the new location in the Houston Region. IDLEWILD has 2 regions as San Francisco and Derver in the present meaning that the 2 regions were merged together. The merging of the 2 regions caused nightmare in managing the IP addresses of the 2 regions all together. This is due to the reason that managing the IP address statically results in IP conflict and broadcasting. This led to complications of slow network connection and the staff can hardly communicate. The main purpose of this project is to resolve broadcast by sub netting and using VLAN. Sub netting allows the creation of multiple logical networks that exist within a single like Class A, Class B and Class C. In this scenario of IDLWILD we are using Class B network which we will subnet to have network 172.16.0.0. The natural mask is 255.255.0.0 or 172.16.0.0/16. Extending the mask to anything beyond 255.255.0.0 means you are sub netting. When you subnet you will have the ability to create a lot more subnets than with the Class C network. Using five bits from the original host bits for subnets will allow, to have 32 subnets

Secret Recipe Business Plan

Secret Recipe Business Plan Secret Recipe, Dubai, UAE will be a franchise of catering company called Secret Recipe owned by ALAMERI Group. The business is in food services industry and has successfully established its brand name in Malaysia, Singapore, Indonesia, Thailand, China, Philippines, Pakistan, Brunei, and Australia by virtue of its fine quality cakes, fusion food and distinctive service. The purpose for this business plan is to provide a written guide for managing the franchise of Secret Recipe, Dubai, UAE and seek financing from relevant institution and investors by providing detailed funding business plan. This franchise of secret recipe will be owned by Taleb AlAmeri and will be primarily involved in the provision of variety fresh food products such as cheese, chocolate and fresh, cream cakes, health cakes and brownies. The business mission statement is to be solution oriented innovatively and the vision is to be one of the leading telecommunication companies in Africa. The objective of the company is to provide job opportunities youths, generate income for owners and to give 10% of the revenue back to the community. The fundamentals of this business success rest with the capacity to deliver value to the customer at competitive prices (Ajami, Cool Goddard, 2006).With the background knowledge of stiff competition in the food industry within Dubai, this franchise aims at attracting and retaining its customer through the provision of fine quality food products and distinctive service. In addition to the above, the fundamentals of this business will encapsulate best demonstration of ethical practice within both the internal and external environment. This is because of the backdrop knowledge of the stringent measures and legislations that govern the food industry. The food industry is expected to grow in the near and innovative approaches to food service and delivery will define success within this industry. Changing consumer demographics and increasingly complicated customers are pushing food service businesses to the drawing boards (Toyne Nigh, 1999). The success of this franchise will depend on the capacity to create a powerful market niche that cannot be broken. General Company Description What makes the business very unique is the realization that businesses and consumers are increasingly demanding more leading edge in service and product delivery in the most efficient, time saving and reliable way (Hill, 2008). The Secret Recipe situated at Dubai Mall, UAE a franchise of Secret Recipes will be primarily involved in the provision of fine quality cakes and fusion food. This will encompass the provision of more than 20 types of fusion food, 40 cake creations and pastries, with a flavorful range of ice cream and beverages. Mission statement: To provide world class food services to the customer. Vision: To become a leading provider in fine quality cakes and fusion food. The company will offer value addition services innovatively using the existing technology for reliability and efficiency. With a powerful website to be developed, the customers will be able to sample and purchase their preferred choice of quality fine cakes and fusion foods online. The website will be used to advertise and sell the products and services offered by the company. Company Goals and Objectives Goals To have the franchise operating exactly three months after receiving adequate funding. Obtain $ 200,000 of capital by 31st December 2010 to staff and launch the business towards achieving its long term goals. To attain the stated year goal of recruiting employees by the beginning of the year 2011. Objectives Achieve excellent levels of high ethical standards within the food industry. Have a healthy, successful company that is a leader in customer service and that has a loyal customer following. Achieve a sales target of $20,000 within the first three months of the operation. Business Philosophy: The most important aspect of this business is to provide value to the customer through distinctive service and in a manner that guarantees their return. The more than 20 types of fusion food, 40 cake creations and pastries, with a flavorful range of ice cream and beverages will be sold to all customers of different backgrounds in United Arabs Emirates. However, I envisage to draw the larger bulk of my customer base from the residents of Dubai City. Because of the increasing innovative marketing approaches, the marketing strategy will strive to reach customers of diverse backgrounds and will then be narrowed down to touch on the specific market niche. Food industry is a growth industry that has leaped from one phase to the other and is expected to record tremendous growth in the future. Changes that will arise in the future will mainly be in regard to changing demographics and the complexity in the demands of the customer. This will also include changes in technology that will define the operations and customer service delivery (Singh Delios, 2005). My company will stay in tandem with the changes in the food industry and at pace with technological advancement to reap the most out of the benefits presented by these two growth scenarios. My greatest strength and competency that will also be my competitive advantage is the unrivalled experience in the food industry and chain management. As the owner of this franchise, I plan to put in an aggressive and innovative marketing campaign within this industry that will immediately smoke away competition and enhance my entry and strong regional presence in Dubai. I strongly believe my competitors strength will be based on tears of operation that have made them acquire a deeper sense of understanding of the customer. In fact, after an intensive research on the competitors strengths and weaknesses, the company realized that the competitors strengths are based on the experience, location, advertisement, employee, technology, financial, political connection and goodwill. I plan to plough in my vast experience in management within the food industry to his business and ensure its survival. In addition to the above, my capacity to raise capital that will cover important business start-up areas will provide me a competitive advantage against my competitors who has struggling with waning confidence in small and medium sized entrepreneurs by banks. Furthermore, I expect to reap from the efforts of the main company in regards to brand and image building. This will be a sole proprietorship type of business. This is because I believe the inability to raise adequate capital forms the reason behind enlargement and partnerships. Capital is not a problem in my case. Furthermore, sole proprietorship offers the best and simplest environment in regard to decision making (Cherunilam, 2004). I plan to execute my decisions and discharge my duties within this business without any opposition and inhibition. Products and Services This will be an entirely food business that will only deal with the products of the mother company. I will sell the more than 20 types of fusion food, 40 cake creations and pastries, with a flavorful range of ice cream and beverages offered in allÂÂ  Secret RecipeÂÂ  outlets. After an intensive research on the competitors strengths and weaknesses, the company realized that the competitors strengths are based on the experience, location, advertisement, employee, technology, financial, political connection and goodwill. These will form the areas that will define my competitive disadvantages. As a new franchise, I plan to get into the market at a slightly reduced sales fee in comparison to my competitors. This will form the introductory offer of the business that is aimed at drawing the customer to the business. Marketing Plan My marketing ill revolve around the need to adapt my brands to meet local and regional culture because of the understanding that branding act as a means of linking items that are part of product line and emphasizes the individuality of product items. This emphasis can only be achieved in instances where products items fit into the local or regional culture of the target market. This is a food industry and therefore I expect very little conflict with the culture of the people in Dubai. In addition to the above, the adapting of these brands to fit into the local and regional culture of the target market is a competitive advantage that is commonly used by competing firms engaged in the sale of similar or substitute products. In essence, this means that a firm that outperforms the others in the primary goal of performance-profitability-has competitive advantage. A reference back to the branding generic model of firms can be made, where the question of whether firms are branding strategies is cost driven or value added arises. Value added competitive advantage arises in instances where competing firms attach strong cognizance to the understanding of local or regional culture before launching their product lines. Companies succeed in branding strategies that their rival because their products are positioned to capitalize on their unique characteristics of a local or regional group and which, in one or more aspects, their rivals find hard to emulate. This competitive adv antage gives it a basis for outperforming competitors because of the value that firms are able to present to the customer. These will define my marketing plan. Management and Organization As I have stated, the day to day management of the business will be my primary duty with the support of other individuals that will form part of employees in the company. The procedure of running the business will be through delegation as per the chain of current bellow DIRECTORS CEOs SENIOR MANAGER FINANCE MANAGER ASSISTANT AGENTS WATCHMEN HUMAN RESOURSE MANAGER The managers and the staff are very important for the company as they are the means through which goals are realized, duties are carried out and they provide the links between the organization and the clients. 5.2 Management team The initial management team consists of the founders who will be working jointly as shareholders. The founders of the company share a vision for the success of Secret Recipe Franchise situated in Dubai, UAE. Their duty will involve day to day running of the business which involves finance, logistics and human resource. In future the company will have a general manager, finance manager and human resource manager who must have a degree or diploma with the relevant course from a recognized University or College. 5.3 Other personnel Apart from the management team, the company is having three (3) supervisors at the head office and one (1) assistant supervisor in every department. The company is planning to employ watchmen, office messenger and more assistant agents as we will be expanding. These personnel have and will have minimum qualification of O level education and diverse knowledge in the food industry. 5.4 Recruitment The management team has been able to recruit other personnel through networking and train them within the already existing outlets before they are posted to the new outlets. The business will also consider advertising through posters, internal memo, friends and relatives, internet, electronic media like radio and printed media like newspapers. The recruitment process will involve short-listing of the applicants, interviewing of the shortlisted applicants, selection of the successful applicants and finally issuing the appointment letter. We will also recruit through confirmation of the interns and the volunteers. 5.5 Orientation, training and developing of staff Secret Recipe Franchise Company will carry out orientation, training and development of staff through induction, on the job training, contract training, refresher courses, internship and evaluation after training. The company is looking forward to become custodians of a very fragile yet integral good: customer trust, therefore the company will maintain refresher courses to ensure all our staffs are properly aligned when it comes to personal integrity. 5.6 Remuneration/incentives 5.6.1 Salaries/wages The company will offer to the personnel a very competitive basic salary according to the qualification, experience, position and expertise. The salary will also be based on what the competitors offer and the companys returns. There will be a commission for the sales personnel and prompt payment for wages. 5.6.2 Fringe benefits Incentive is also another factor that the company has put at the top of priorities. Incentives will enable, motivate or encourage a particular course of action which in turn will contribute to the company success. We will offer allowances in terms of overtime, leave, millage, hardship and many more as they may arise. There will be bonuses including awards in terms of value for money and certificates. Currently the company provides tea, soft drink and has installed a television system. The business will soon embark on taking our staff to the trips, have insurance cover for them and remit contributions on their behalf to their respective insurance companies. 5.7 Support services The company will require the following support services; financial advisor, legal advisor, banking system, security support services, infrastructure and insurance services. 9. FINANCIAL PLAN The company has at its disposal a sum total of $20,000 as a financial source from directors personal savings. We are therefore looking for funding from other investors and banks. The business finance will be used to for the facilities, equipments, materials, cash for operating expenses and salaries, fees and other costs. 9.1 Capitalization 9.1.1 Own contribution Capitalization based on the shareholders contributions is $20,000. 9.1.2 Proposed funds from borrowing sources For the business to operate as proposed, the start-up cost must be met. The company is therefore proposing funds from borrowing sources of $ 20, 000 9.1.3 Total investment Total investment is the sum of own contribution and the proposed funds from borrowing sources which is $40,000. The following sections lay out the details of the financial plan for rapid, but controlled growth for the next one year. The simple structure to be adopted by the company will provide a great deal of flexibility resulting in few coordination problems hence quick reaction to changes in the market. 9.7 Measurement of profitability 9.7.1 Operating profit margin Operating profit margin = (operating profit/Revenue) x100 First year: Operating profit margin = (1,400/101,500) x 100 = 1.38% Second year: Operating profit margin = (4,730/131,950) x 100 = 3.58% Third year: Operating profit margin = (22,009/171,530) x 100 = 12.83% 9.7.2 Current Ratio Current Ratio = Current assets/Current liabilities Projected Current Ratio by the end December 31, 2011 = 21,000/11,200 = 1.875 9.7.3 Return On Investment (ROI) Return On Investment (ROI) = Net Profit/Investment Return On Investment (ROI) for the ended December 31, 2010 = 1400/23,000 = 0.06

Management Economics Essay

Introduction. The business cycle or economic cycle refers to the ups and downs seen somewhat simultaneously in most parts of an economy. The cycle involves shifts over time between periods of relatively rapid growth of output (recovery and prosperity), alternating with periods of relative stagnation or decline (contraction or recession). These fluctuations are often measured using the real gross domestic product. To call those alternances â€Å"cycles† is rather misleading, as they don’t tend to repeat at fairly regular time intervals. Most observers find that their lengths (from peak to peak, or from trough to trough) vary, so that cycles are not mechanical in their regularity. Since no two cycles are alike in their details, some economists dispute the existence of cycles and use the word â€Å"fluctuations† instead. Others see enough similarities between cycles that the cycle is a valid basis of studying the state of the economy. A key question is whether or not there are similar mechanisms that generate recessions and/or booms that exist in capitalist economies so that the dynamics that appear as a cycle will be seen again and again. Just as there is no regularity in the timing of business cycles, there is no reason why cycles have to occur at all. The prevailing view among economists is that there is a level of economic activity, often referred to as full employment, at which the economy theoretically could stay forever. Full employment refers to a level of production at which all the inputs to the production process are being used, but not so intensively that they wear out, break down, or insist on higher wages and more vacations. If nothing disturbs the economy, the full-employment level of output, which naturally tends to grow as the population increases and new technologies are discovered, can be maintained forever. There is no reason why a time of full employment has to give way to either a full-fledged boom or a recession. Text. Business Cycle, term used in economics to designate changes in the economy.  Ever since the Industrial Revolution, the level of business activity in industrialized capitalist countries has veered from high to low, taking the economy with it. Characteristics of business cycle are: -A trade cycle is wave like movement. -Cyclical fluctuations are recurrent in nature. -Expansion and contraction in a trade cycle are cumulative in effect. -Trade cycles are all pervading in their impact. -It is characterized by the presence of crisis i.e. downward movement is more sudden and violent than the change from downward to 0upward. -Cycles differ in timing and amplitude they have a common pattern of phases, which are sequential in nature. Phases Of Business Cycles: The ups and downs in the economy are reflected by the fluctuations in aggregate economic activities such as production, investment, employment, prices, wages, bank credits etc. The various phases of the trade cycles are: Prosperity: Expansion And Peak. This phase begins with the rise in the national output, consumer and capital expenditure, level of employment and inventories. Debtors find it more convenient to pay off their debts. Bank rate increases so credit facilities, idle funds for investment in production since stock prices increases due to increase in profitability and dividend. Purchasing power continues to flow in and out of all kinds of economic activities. Expansion continues with the multiplier process. In earlier/ later stages additional workers can be obtained by giving higher wage than prevailing in the market. Input prices increases rapidly which leads to increase in cost of production. As a result price increases and cost of living increases which lower the consumption rate. The demand for new houses, cement, iron, labor tends to halt and same is for furniture, automobiles etc. This makes reaching the peak. To summarize we can say that: -It is a turning point in the business cycle – the end of expansion -Economy at or close to full employment -Capital and Labor Utilization at a high -Prices and cost rise at a moderate rates -Firms profit at high -Interest rates rise -Consumers and firms expectations favorable Turning Point And Recession. After reaching the peak, demand starts declining. Producer unaware of this fact continues to increase production and investment. But after sometime they realize that their inventories are pilling up and they have indulged in over-investment. Consequently further investment plans will be given up-order for new machinery, raw materials. Demand for labor ceases. Temporary and casual workers are removed. Producers of capital goods and raw materials cancel their order. This is the turning point and beginning of recession. Further the income of wage and interest earners also decreases. This causes demand recession. Producer lower down the prices to get rid of inventories  but consumer expects further decreases in price and hence postpones their purchase. Investments starts declining leading to decrease in income and consumption, bank credit shrink and prices decrease. At this stage the process of recession is complete and the economy enters the phase of depression. To summarize this: -Consumer spending falls -Investment spending falls -Inventories accumulate -Firms profit’s decline -Business Failure increase Depression And Trough. This is the phase of relativity low economic activity. It indicates fall in production, increased unemployment and a rapid fall in the general price index. Workers lose their job, debtors find it difficult to pay off their debts, and investment in stock becomes less profitable. At the depth of depression, all economic activities touch the bottom and phase of trough is reached. Weaker firms are eliminated from the industry. At this point, the process of depression is complete. Due to unemployment, labor starts working at lower wages. Consumer expects no further decline in price and start spending. Hence demand picks up. Stock prices fall during recession; the prices of raw material fall faster than the prices of the finished products. Therefore profitability tends to increase after the trough. Producers’ start replacing worth-out capital, investment picks up and employment gradually increases. Following this demand increases, bank credit becomes easily available at a lower rate. Due to increase in income and consumption, the multiplier effect increases the economic activities. The phase of depression comes to an end over time  depending on the speed of recovery. To summarize this: -The turning point in the cycle – the end of contraction -Characterized by high unemployment and low consumer demand relative to industry capacity -Greatest period of excess capacity over the cycle -Business profits are low or negative -Some prices are falling other unchanged -Consumers and firms expectations about future are bleak Recovery. It starts when prices further stop falling. Producers see no risk in undertaking production. Firms use idle capacity to increase production. This generates employment and income, which creates additional demand for consumer goods and services. Businessman when realize increase in profitability. Hence they speed up production machinery. Businessman starts increasing their inventories, consumer start buying more and more of durable goods and variety items. With this process catching up, the economy enters the phase of expansion and prosperity. The cycle is thus complete. To summarize this: -Employment, production, prices and wages begin to rise at roughly the same time -Expectations of consumers and firms optimistic or favorable -Investment spending increases -Consumer demand rises Causes of Cycles. Economists did not try to determine the causes of business cycles until the increasing severity of economic depressions became a major concern in the late 19th and early 20th centuries. Two external factors that have been suggested as possible causes are sunspots and psychological trends. The sunspot theory of the British economist William Jevons was once widely accepted. According to Jevons, sunspots affect meteorological conditions. That is, during periods of sunspots, weather conditions are often more severe. Jevons felt that sunspots affected the quantity and quality of harvested crops; thus, they affected the economy. A psychological theory of business cycles, formulated by the British economist Arthur Pigou, states that the optimism or pessimism of business leaders may influence an economic trend. Some politicians have clearly subscribed to this theory. During the early years of the Great Depression, for instance, President Herbert Hoover tried to appear publicly optimistic about the inherent vigor of the American economy, thus hoping to stimulate an upsurge. Several economic theories of the causes of business cycles have been developed. According to the under consumption theory, identified particularly with the British economist John Hobson, inequality of income causes economic declines. The market becomes glutted with goods because the poor cannot afford to buy, and the rich cannot consume all they can afford. Consequently, the rich accumulate savings that are not reinvested in production, because of insufficient demand for goods. This savings accumulation disrupts economic equilibrium and begins a cycle of production cutbacks. The Austrian-American economist Joseph Schumpeter, a proponent of the innovation theory, related upswings of the business cycle to new inventions, which stimulate investment in capital-goods industries. Because new inventions are developed unevenly, business conditions must alternately be  expansive and recessive. The Austrian-born economists Friedrich von Hayek and Ludwig von Mises subscribed to the overinvestment theory. They suggested that instability is the logical consequence of expanding production to the point where less efficient resources are drawn upon. Production costs then rise, and, if these costs cannot be passed on to the consumer, the producer cuts back production and lays off workers. A monetary theory of business cycles stresses the importance of the money supply in the economic system. Since many businesses must borrow money to operate or expand production, the availability and cost of money influence their decisions. Sir Ralph George Hawtrey suggested that changes in interest rates determine whether executives decrease or increase their capital investments, thus affecting the cycle. Regulating the Cycle Since the Great Depression, devices have been built into most economies to help prevent severe business declines. For instance, unemployment insurance provides most workers with some income when they are laid off. Social security and pensions paid by many organizations furnish some income to the increasing number of retired people. Although not as powerful as they once were, trade unions remain an obstacle against the cumulative wage drop that aggravated previous depressions. Schemes to support crop prices (such as the European Common Agricultural Policy) shield farmers from disastrous loss of income. The government can also attempt direct intervention to counter a recession. There are three major techniques available: monetary policy, fiscal policy, and incomes policy. Economists differ sharply in their choice of technique Some economists prefer monetary policy, including the American Milton Friedman and other advocates of monetarism, and is followed by most conservative governments. Monetary policy involves controlling, via the  central bank, the money supply and interest rates. These determine the availability and costs of loans to businesses. Tightening the money supply theoretically helps to counteract inflation; loosening the supply helps recovery from a recession. When inflation and recession occur simultaneously–a phenomenon often called stagflation–it is difficult to know which monetary policy to apply. Considered more effective by American economist John Kenneth Galbraith are fiscal measures, such as increased taxation of the wealthy, and an incomes policy, which seeks to hold wages and prices down to a level that reflects productivity growth. This latter policy has not had much success in the post-World War II period. Conclusion. Thus we can say that the central idea of business-cycle literature, that the economy has regular and periodic waves–a cycle–lasting for several years, has few adherents today. Perhaps such cycles never existed, or perhaps they once did but no longer do because the government now plays an active role in the economy. However, the business-cycle approach remains useful because it is an easy way to introduce a number of macroeconomic topics, including the adjustment process that remains central in macroeconomics.