Such negative phenomena as unemployment, bankruptcy, depression, and a sharp decline in the standard of living in the country are firmly associated with the concept of “economic crisis”. 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 disruptions in the normal economic activities of the country. At the same time, there is an accumulation of internal and external debts that cannot be paid off on time, as well as a market imbalance 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, since one way or another there comes a moment when the accumulated contradictions between the production of goods and services and the consumer ability of the solvent population break through 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) - revival (peak) - rise. Due to the fact that in recent years the development of trade has led to the formation of numerous international relations, the crisis has become international in nature. The world community is taking systematic measures to prevent it, namely: the state control over the market is tightening, international financial companies are being created to monitor the course of the economic situation, etc. There are two types of economic crisis: a 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 manufacturing enterprises and subsequent bankruptcy. An underproduction crisis consists in a decrease in supply, which can be caused by natural disasters, strict government bans and quotas, military actions, 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 the curtailment of production of a large number of companies, as a result - an increase in unemployment, bankruptcies, and a decrease in wages. Typically, this crisis starts in one or more industries and then spreads to the entire economy.
