CAUSES OF ECONOMIC CRISIS

Abstract

Equitable distribution of income to ensure equality, fairness and productivity are important activities in the economy to avoid an economic crisis. Redistribution of income for the development of poor areas partially affects the productivity of labor in the economy, but it achieves fairness in the economy with the aim of expanding the market. The economic crisis is a product of human activity contrary to the economic laws of supply and demand. Discovering economic opportunities on the world or national market means discovering what is applicable to human well-being, what "works" and even contrary to the principles of conventionality. In economics and all other scientific discoveries, knowledge cannot be based on the divination of physical and other laws, but it must be confirmed in practice. The economic crisis is causing a disturbance in the economy, that is, in the relations between production and consumption. The gold standard, which is closely linked to the countries of the world in the network of fixed exchange rates, has played a key role in the transmission of the American economic downturn, as in other countries. Recovery from the Great Depression was largely fueled by the rejection of the gold standard on August 15, 1971. This has led to rising inflation rates and a significant rise in the price of gold over the next few decades. It is better for the economy of some countries and the whole world not to have a gold standard, because the central bank can stimulate economic growth with monetary policy, reduce the unemployment rate, manage the exchange rate of its own currency.

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