1. Explain the economic cycle of how the economy can spiral downward or upward.

Question

A: The economy can spiral downward or upward very easily. If sales of a product declines, for example, then this loss of demand would mean loss of demand for the materials that were used to make that product. As a result, industry would slow, causing lower wages and unemployment which would help contribute further to the decline of sales for the product. Fewer sales would also contribute to lower sales, which would then lead to more job layoffs, causing the economy to spiral downward. However, if product sales do not decline, then there would a high demand for the materials harvested to make the products as well as for workers to manufacture it. Industry would boom, people would have money to buy the product, and the economy would spiral upward.

2. Explain how the Housing crisis of 2008 and the cause of the Great Depression are similar. (Complete Sentences on the back)

A: The cause of the Housing crisis of 2008 and the Great Depression are very similar. In 2008, a decline in housing prices caused by the collapse of a housing bubble triggered a nationwide banking emergency in the United States. This is very similar to the major cause of the Great Depression: the Stock Market Crash of 1929. This market crash was caused by the decline of stock values and contributed greatly to the Depression.

Answer 1

You seem to have a good grasp of both questions, as usual. I would not use a "product" as a cause of spirals, though Sales of consumer goods in general will cause spirals, but not one product. And raw materials sales alone won't cause a spiral. Wages do. If people have no money (or less money), they can't buy the autos and clothing, etc. When they have money, they consume goods. When home sales, for example, are down, contruction workers are not needed, so get laid off. Then they can't buy their own new houses or anything else, etc.

Answer 2

So should I change anything besides the term "product"?

Answer 3

Also, will you check my answers in my other posts>?

Answer 4

I just did check your other questions. No, I think if you just broaden your wording to make it not just A product to consumer goods in general, your answer is basically good.

Keep in mind that if, say, demand for automobiles is low and workers are laid off, all the suppliers of parts for cars and trucks will sell less and lay off workers, too. Those umemployed people will not have money to buy clothing, take vacations, buy new TV sets or furniture, etc., etc., etc., which then will cause lay-offs in those industries -- thus the spiral. And it works the other way, too. More demand means more employment and more money for people to spend.