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Homework answers / question archive / Why does the business cycle affect output and employment in durable goods industries more severely than in industries producing non-durables?
Why does the business cycle affect output and employment in durable goods industries more severely than in industries producing non-durables?
As economic growth shrinks or contracts, the cyclical change causes employees to be laid off from their jobs until things pick up again. Those employees will continue to need non-durable goods such as food, clothing, and medical services. But they will likely cut back on durable goods purchases. Buying new furniture or a new vehicle would be examples. In a downturn of the business cycle, they will continue to pay for food, clothing, and shelter, but they will not buy a new living room set or a new refrigerator or a new car unless it's absolutely essential. They will more likely fix what they have or do without.