The Great Depression

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The Great Depression

• The Business Cycle

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Economy

• Economy the production and consumption of goods
  and services of a community
• So, an economy consists of people who buy
  products and those who sell them.
• All of us in this room are consumers - we buy
  products like food, clothes, games, cable for our
  TVs, entertainment etc.

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Economy

• The rate at which people buy and the amount of
  goods/services that are produced/sold does not
  remain the same at all times it varies!
• As a result, sometimes economic conditions are
  good (wages are high, sales are great, production
  is high, and unemployment is low) and sometimes
  they arent so good (Sales are low, wages are
  low, production is low, unemployment is high)

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Economy

• The way that our economy goes from Boom
  (Prosperous) to Bust (Depression) is called the
  Business Cycle
• it has 4 cycles AND can be found on page 181 in
  your textbook (handout)

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Business Cycle

• Includes four stages
• Prosperity
• Recession
• Trough / Depression
• Recovery

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Business Cycle

• 1920s BOOM/Prosperity stage ? people are
  willing to take monetary risks

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Business Cycle

• Recession ? business is slowing down, companies
  have produced more goods than they can sell
  have to lay off workers and those workers dont
  have money to buy things sales fall

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Business Cycle

• Depression (BUST) 1930s ? layoffs unemployment
  goes up, business go bankrupt
• A recession is when a neighbour has to tighten
  his belt. A depression is when you have to
  tighten your own belt. And a panic is when you
  have no belt to tighten and your pants fall
  down. T.C. Douglas (Page 182)

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Business Cycle

• Recovery there is a shortage of goods that
  people want or need and production must go up,
  thus, more people are hired and they have money
  to spend etc.

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THE END ?