Historical example of labor supply and demand

Historical example of labor supply and demand - why would...

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The Great Depression happened when the stock market in the United States dropped dramatically. One of the factors in bringing about the depression was a direct result of supply and demand. Supply and demand go hand in hand and must equal in a stable economy. When there is too much supply demand for the product drops, if demand goes up then the supply should go up to meet the demand. There were many products that the U.S. people could not consume. A lot of the overage happened because a technological advance changed how goods were produced. Products were produced more efficiently; however they did not increase employee’s wages so the employees worked more but didn’t make more money. Therefore, people could not afford to buy the amounts of products that were being produced. There was no equilibrium. When there was an overage of products there were fewer demands for laborers because they were not able to sell the products that they had so
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Unformatted text preview: why would it be phi sable to produce more of them. Employers could have given their employees raises but this wouldn’t have fixed the problem. The laws of supply and demand made the industries drop their level of output to compensate for their loss of overall profit. This made there be less work, overage of products, and a failing economy. The Great Depression came to an end when the U.S. started making war goods for Britain. This created many jobs which allowed people to earn money and begin spending again. President Roosevelt also had an impact on the recovery of the Great Depression. He made new policies, changed how things in the economy went and created different agencies to help with the situation. That helped to create more jobs and demand eventually caught up with the supply due to the labor market increase....
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This note was uploaded on 09/12/2010 for the course XECO XECO 212 taught by Professor Kristinpaul during the Fall '10 term at University of Phoenix.

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