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Economic Ups and Downs

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Submitted By darlindb
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Merriam-Webster (2015) defines gross domestic product (GDP) as “the total value of the goods and services produced by the people of a nation during a year not including the value of income earned in foreign countries.” (merriam-webster.com). The GDP is one of the main indicators used to determine the condition of a country’s economy as it represents economic growth and production. Economic growth and production, positive or negative, has a major impact on most everyone within that economy. There are certain characteristics that are associated with the rate of the GDP. When the economy is going good, unemployment is usually low and wages normally increase. The stock market is usually effected with a big change, up or down, in GDP. Negative GDP growth plays a role in determining a recession, a period when real GDP falls for six months. “Real GDP does not always grow smoothly—sometimes it collapses suddenly, and the result is an economic downturn.” (O’Sullivan, 2014, p. 302). Sometimes this economic downturn can lead to a depression, a severe recession. Moderate contraction and expansion cycles are part of the normal economic system. Throughout history there have been many fluctuations in the GDP of the United States caused for various reasons such as drastic changes in the stock market, oil prices, world events, and wars. Some fluctuations have had more wide-spread, lasting effects than others. The Great Depression was the time from 1929 to 1933 when the real GDP took a nosedive, creating the “most severe disruptions to ordinary economic life in the United States during the twentieth century.” (O’Sullivan, 2014, p. 303). The effects of the Great Depression were felt throughout the world. In 1933, the United States GDP was sitting at -45.32%. The country was still with the grip of the Depression. Many things contributed to that dark time in our history

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