Were an important component of nineteenth-century recessions due in large part to increased importance of the service sector, which tends to be less volatile than industry because many goods are purchased irregularly?

Close

Link to this answer

Share this credible answer with others. Simply paste this code into your blog or Web page:

<a href="http://qanda.encyclopedia.com/question/were-important-component-nineteenthcentury-recessions-due-large-part-increased-importance-service-sector-which-tends-less-volatile-than-industry-because-many-goods-purchased-irregularly-618312.html" >Were an important component of nineteenth-century recessions due in large part to increased importance of the service sector, which tends to be less volatile than industry because many goods are purchased irregularly?</a>

Other possible explanations of increased economic stability include the lesser incidence of financial panics, which were an important component of nineteenth-century recessions, due in large part to deposit insurance, introduced in 1934; increased flexibility of wages and prices, important for equilibrating mechanisms; management of inventories so firms do not build them up at the start of a downturn, then slash production to compensate; increased importance of the service sector, which tends to be less volatile than industry because many goods are purchased irregularly; and increased business confidence that downturns will be short.