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The Complete Idiot's Guide to Economics, 2nd Edition by Tom Gorman

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Booms and Busts

When consumers and businesses increase or decrease demand gradually, the cycle of recession and recovery will be relatively smooth, although hardly painless. But exaggerated responses by consumers or businesses can create a boom or a bust. (A bust is a colloquial term for a sharp, severe downturn.)
A boom occurs when demand increases sharply over a sustained period. The increase in demand can be broad-based and affect the entire economy, or it can be more specific. For example, a nationwide housing boom may be driven by a dramatic increase of adults in the population who are ready to become homeowners. More specifically still, a housing boom can occur in a rapidly growing city, as occurred in Las Vegas from the late 1980s through ...

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