Economy is not just spending. It is about meeting our needs and
wants based on scarce resources.
Every year, the world population increases and therefore, the
demand on resources intensifies. Example: Parents need jobs to pay
for their kids education, and we need money to buy things we
want.
If the economy goes into recession, it means that we are
producing output that is less than the previous year. And if we are
producing lesser output, we will not be able to satisfy the world
demand as the world population increases. And this will lead to
loss of jobs and income and thus when there is loss of income, the
demand for goods will drop further more and thus the vicious cycle
will continue and worsen the effect from recession to
depression.
This is why I tink government usually try to improve the economy
by encouraging consumer spending. The other kind of polices
govt usually use is fiscal policy which is to improve output of the
nation by spending on infrastructure. E.g Build more roads, School,
IR...etc
Therefore, in my humble opinion, I dont think that human serve
economy or economy serve human.
Economy exist becoz it is a way of satisfying human's need
and want.
please correct me if my concept is wrong, coz i havent touch
econs for a long time already so i might mix up some of the
concept.
