ContextThis assessment allows you to reflect on how assessments 1 and 2 have helped you to...

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ContextThis assessment allows you to reflect on how assessments 1 and 2 have helped you to understand the overall subject contents and apply thecore concepts in real-time job environment. This assignment is to mainly help you reflect how the unit has helped you with a soundunderstanding of the volatility of business environment and effective decision making as business economists. Your reflection will be a. You will have a minimum of 6 academic references to support your answer. Do not include information from blogs.You will follow APA 6th edition referencing style.

Komalavalli · Accepted Answer

Volatility of Business environment:
Business cycles are a type of fluctuation found in Aggregate economic activity. There are four stages in business cycle they are boom, recession, depression  and recovery .During recession stage economy will suffer from high unemployment due lack of aggregate demand which lead to decrease the business activities in the economy. Business cycle indicates Firm will invest more during recovery and boom stage of business cycle. They contract their investment during recession and depression stage of business cycle. From the two assignments it is clear that the outbreak of novel corona virus leads to economic downturn in Australia. This states the Australian economy suffers from recession in business cycle. As a business economist I will take a decision to reduce an investment, labour employment in the firm. Since the economy is not favour for the business. 
Review of Literature:
Crawford, Jin and Simpson (2013) The paper examines how firm investment, profitability and labour productivity have changed over the recession period compared with a pre recession trend. They have employed both firm level and individual level data of UK firms from 1997 - 2009. They found that during recession period labour productivity decreases within firms, they also find differential behavior of firms across different sizes of firms. Small and medium sized experienced larger fall in labour productivity, investment per worker compared to larger firm. They found that smaller firms have less access to financial credit compared to larger firms during post recession periods.
Dangl  and Yu (2016) The paper examines the pattern of firm’s investment behavior through empirical analysis of quarterly compustat – CRSP merged database from 1975 to 2011.They developed dynamic models which reflects empirical patterns. They found that due to disinvestment is costly for firms, their investment decision is depends on both current and future expectation of the economic stability. Average capital growth rate across the firm exists a negative point and individual firms faces positive spike.

ContextThis assessment allows you to reflect on how assessments 1 and 2 have helped you to understand the overall subject contents and apply thecore concepts in real-time job environment. This...

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