The Recession We Need To Have | Economics Explained

The video explores the business cycle, highlighting economic expansions and contractions. It discusses the roles of supply and demand in determining prices and economic equilibrium. The video also examines government strategies to influence economic growth and the necessity of recessions for long-term economic health. It explains how recessions can filter out poor economic practices and create opportunities for robust businesses.

What is the typical frequency of economic booms and busts?

• Every 25 to 30 years

• Every 7 to 10 years

• Every 15 to 20 years

• Every 2 to 3 years

How do supply and demand influence market prices?

• Supply and demand have no effect on prices

• Prices are determined by the interaction of supply and demand

• Prices are determined solely by demand

• Prices are determined solely by supply

What is a potential consequence of increasing supply without increasing demand?

• Inflation

• Deflation

• Stagnation

• Recession

Which sector is primarily responsible for supplying goods and services in major economies?

• The government sector

• The international sector

• The non-profit sector

• The private sector

What is one way governments can indirectly encourage supply-side growth?

• Building more public infrastructure

• Reducing welfare programs

• Increasing taxes

• Providing government grants for research and development

What are the two broad classifications of economic downturns?

• Domestic and international downturns

• Monetary and fiscal downturns

• Short-term and long-term downturns

• Demand and supply downturns

How can economic downturns benefit long-term growth?

• By eliminating poor economic practices

• By increasing inflation

• By reducing consumer confidence

• By increasing government debt

What role do investors play during economic booms?

• They allocate capital to maximize output

• They decrease consumer spending

• They increase government intervention

• They reduce market competition

What is a potential downside of full employment in an economy?

• Lower wages

• Increased inflation

• Decreased productivity

• Higher unemployment

What is the NAIRU?

• A model of the relationship between inflation and employment

• A type of government policy

• A form of international trade agreement

• A measure of economic growth