Brandon_T_wk_3_CP - American farms made large amounts of...

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Checkpoint: Week 3 Historical Example of Labor Supply and Demand In 1929 the United States saw a enormous slump in the economy that has become known as the Great Depression. Supply and demand was one of the causes in that it did not work as it is supposed to. The beginning of the crash took place when most investors lost everything when the stock market crashed. This in turn caused a world-wide economic recession which escalated into a depression. Labor supply and demand became unbalanced when the demand for laborers took a dramatic drop because the current economic conditions. Depressions are known as a period of low living standards and low employment rates. Normal forces of supply and demand would have reduced wages, which should have lowered the business costs and increased employment and production of goods, but government restrictions on competition made the normal forces of supply and demand not work.
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Unformatted text preview: American farms made large amounts of goods during the prosperity before the Depression. The prices of goods continued to soar but the wages stayed the same. With people not having enough money to purchase these goods they stopped buying them. Normally the producers would slow production but instead they continued to produce the same amounts. Eventually this caught up to the producers of goods so there only way to cut back was to lay off employees. The laid off employees only made the market worse cause they also had no money to purchase goods which cause less sales of goods and more layoffs. When it was all said and done some 25% of the population was unemployed. Reference: Ohanian, L. E. (2009). WHy Did The Great Depression Last So Long? . Retrieved from http://www.forbes.com/2009/04/30/1930s-labor-wages-business-ohanian.html...
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