An economic BOOM is a time of fast economic growth. This is what happened to the UK and US economies after the end of the second world war in the onset of industrialization.
Financial markets do not usually stay very stable and will speed up in economic booms and slowdown in recessions.
So what are the key features or characteristics of an economic boom?
Financial markets do not usually stay very stable and will speed up in economic booms and slowdown in recessions.
So what are the key features or characteristics of an economic boom?
- When the level of Gross Domestic Product (GDP) is growing faster than the growth of the economy itself.
- There may be an increased in consumer spending habits as people have more disposable income and businesses can make a greater profit margin by raising the price of goods and services.
- With a greater demand for goods and services, company productivity levels may increase to meet with demands.
- As the economy grows, more businesses are able to expand, offering employment opportunities. This means there may be less people unemployed or having to depend on state benefits.
- An economic boom is also great news for governments as there will be more people in work and therefore paying their taxes. This will help raise more state revenue that will in turn help reduce national debt. The increased money raised may even be reinvested in healthcare or education for example.
