The concept of "economic crisis" is strongly associated with such negative phenomena as unemployment, bankruptcy, depression, a sharp decrease in living standards in the country. The crisis is caused by serious changes in the economic situation, and its prolonged continuation can lead to panic and other psychological factors, and as a result, unrest among the population.
The onset of the economic crisis is associated with systematic and irreversible violations in the implementation of normal economic activity of the country. At the same time, there is an accumulation of internal and external debts that cannot be repaid on time, as well as a violation of market equilibrium as a result of a serious discrepancy between supply and demand. The word “crisis” is of Greek origin and literally means “turning point”. This phenomenon can occur both in a particular industry or region, and throughout the country. Unfortunately, the crisis is initially one of the stages of the economic cycle, because one way or another there comes a time when the accumulated contradictions between the production of goods and services and the consumer ability of the solvent population erupt in the form of a deficit or, conversely, an oversupply of products. The economic cycle is a change of four stages: crisis - depression (bottom) - recession (recession) - recovery (peak) - rise. Due to the fact that in recent years the development of trade has led to the formation of numerous international ties, the crisis has become international in nature. The world community is taking systematic measures to prevent it, namely: tightening state control over the market, creating international financial companies to monitor the progress of the economic situation, etc. There are two types of economic crisis: the crisis of underproduction (deficit) and overproduction. And, if several decades ago the first type of crisis often took place, in recent years the volume of production often exceeds the level of demand, which leads to a decrease in the profitability of production enterprises and subsequent bankruptcy. The crisis of underproduction is to reduce supply, which can be caused by natural disasters, strict government bans and quotas, military operations, etc. An acute shortage of goods to meet the needs of the population creates an era of scarcity. The crisis of overproduction, on the contrary, consists in the excess of supply over demand and is the reason for curtailing the production of a large number of companies, as a result of which there is an increase in unemployment, bankruptcies, and a decrease in wages. Typically, this crisis begins in one or more sectors, and then spreads to the entire economy.
