Answered: In the history of the economy, there…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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In the history of the economy, there has been an understanding that the government does not need to intervene directly in economic activities. The economy is only based on market equilibrium (classical/micro economics). This understanding gave rise to the Great Depression. A. Retell the series of events of the great depression until an understanding emerges that there must be direct government involvement in economic activities! B. Give an analysis, what was the main cause of the great depression, even though at that time there was a very significant increase in production?

Definition Video Formula Definition Phenomenon in which market supply and demand balance each other. Market equilibrium is the economic state in which the market demand curve intersects the market supply curve, giving us the equilibrium price and equilibrium quantity for which a commodity can be sold and purchased in an economy. When market equilibrium is achieved, it suggests that all resources have been allocated efficiently and that there is just a distribution of income and resources in the economy. Video Formula

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