sábado, 28 de febrero de 2009

Explanation of the economic cycle
From an economic point of view crisis is the point in which the expansion reaches it in the maximum and produce a explocion going to the recession. Where the rate of the economy falls and the activity has a disminution, the employment and the production descend. This period tends to the insufficiency of the total demand of properties and services to maintain the production at the existing levels; in this case, when fails the production, will also descend the level from use, producing a new decrease of the demand added and a tendency, before the oversupply of properties and services to reduce prices. After transferred certain threshold, it will produce a parallel revival of demand. At this point, therefore, when you have reached the most "profound“ from the recession, the forces able will arise to reactivate the economy. The increases of the investment will impel the use, and therefore the demand of final properties, generating propitious conditions for the reactivation of the economy. The previous thing does not have to be considered like a theoretical and general law but like a more or less abstract description of the operation of the market and an economic cycle.

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