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Uop Economics Week 3 the Great Depression

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Labor Supply and Demand: The Great Depression

What was the impact on the supply and demand of labor on one sector of the labor market?
Explain the factors that affected labor demand and labor supply in the chosen historical example. The Great Depression was one of the worst economic pitfalls in US history. It has had long lasting effects on the state of the economy ever since it’s occurrence in 1929. During this time, the demand for labor had increased greatly, however the supply of jobs was quite the opposite. The Law of Demand was the higher the pay, but in contrast employers were unable to hire the number of employees needed to meet the demand of the business. This showed that the lower the wages dropped, the number of employees also dropped. Employers responded by hiring more employees at the lowest wages possible to increase the number of employees to try and keep up with production. The main problems occurring during the Great Depression was that employers were not hiring employees because the business itself was not successful enough during that time to pay its employees, and as well products were not being bought on the markets to produce enough revenue. Consumers were obviously unable to purchase any goods due to the high rate of unemployment and the limited income they had. The United Stated suffered great financial losses during the Great Depression. This was due in part to a cut back in jobs in the industrial sector of the labor market without a decrease in pay. The initial crash of the stock market triggering the onset of the Great Depression basically set the precedent for so many economic downturns that continue to take place even during today’s economy. With the decrease in the labor supply and today’s high unemployment rate, the labor demand also decreases due to businesses are unable to keep up with the production rate necessary to…...

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