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Economic Cycles

In: Other Topics

Submitted By ryho8
Words 1097
Pages 5
A nation’s economy and economic health is dependent upon its productivity and exploiting all three levels of production: primary production (farming, forestry, fisheries, and mining), secondary production (processing and manufacturing) and tertiary production (retail sales of goods and services devised in primary and secondary production). There can exist a natural ebb and flow of national productivity stimulated by consumer demands (a function of supply and demand), or influenced by government interference and regulation. When governments pass regulations that hinder primary production (either intentionally or inadvertently) then there is a reduction in primary production which produces a slow down of secondary production and a decrease in products supplied to tertiary producers. With a decrease in products supplied the consumer experiences product shortages and increase prices for those products that are produced.

Government regulations can occur in the form of banning production as in limiting the numbers of or preventing production as in eliminating the incandescing light bulb and requiring the production and purchase of florescent lights; interference is also noted within national boundary’s such as with oil production, taxing production as in the coal industry which supplies electrical power and overregulation of production such as is used with environmental protections (EPA) or hinder commerce as with the Commerce department.

Given some of these influences a nation’s economy tends to flow through various stages of a business cycle: Prosperity, recession, depression, and recovery. Economists believe that the last economic depression experienced in the United States and throughout the world occurred in the 1930s. Though the current international developments’, such as increases in sovereign debt and inability to repay loans as with Greece, Spain and Italy...

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