18. How does the business cycle work? (include depression).
• The success and failures of different industries affect each other. An increased demand for goods increased the demand for machines to make these goods. The materials to make the goods were then in higher demand, as well as the workers to make them. This gave the workers higher wages and increased purchasing power, and the demand for them was higher.
• If the demand for goods fell, companies would have to lay off workers. Since the workers wouldn't have as much money, the demand for goods would fall. This caused many factories to close, and the economy would sink into a depression. When demand comes back, the factories would reopen and workers were hired again. This would continue the cycle.