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Then the companies had to cut production and the economy slowed down and sometimes even moved into a recession.
But this time it is different. This business cycle is different from those throughout the post-war era. This time the economy did not slow down because of price inflation and the Fed did not force interest rates much higher. The economy weakened so dramatically because companies quickly cut production and employment as disappointing sales led to an involuntary inventory accumulation.
The high inventory built-up resulted from a drop in consumer spending. This could be explained by the consumer fatigue...
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Common topics in this essay:
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