A Dragon Moves In by Lisa Falkenstern

By Lisa Falkenstern

Rabbit and Hedgehog are having a picnic when... RUMBLE! CRACK! The egg Rabbit’s sitting on hatches. Out comes a child dragon! Rabbit and Hedgehog take him domestic. they've got plenty of fun... till the infant dragon begins to develop. And develop. And develop! The paintings rendered in oil on board supplies a vintage contact to this attractive tale.

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But if demand falls too far, the economy grinds to a halt. E A S Y ECONOMICS 56 EE_C2BoomsBusts 9/29/11 6:28 PM Page 57 E A S Y ECONOMICS 57 EE_C2BoomsBusts 9/29/11 6:28 PM Page 58 BOOMS & BUSTS Q&A Q Is that what causes a recession? A Yes, when demand keeps falling or does not rise as rapidly as production, the economy stumbles into recession. The definition of recession is a little vague, but basically it means a significant decline in activity spread across the economy and lasting for more than a few months.

It traded bananas for oil in the Middle East, then oil for warehouses of rugs in South Asia, which were transferred to Japan for earthmovers. The Latin American nation that had started out with bananas finally had the earthmovers the aircraft owner desired. Trade accomplished. Barter lives. EE_C1Money 9/29/11 6:11 PM Page 41 E A S Y ECONOMICS 41 9/29/11 6:28 PM EASY ECONOMICS EE_C2BoomsBusts Page 42 chapter 2 Booms & Busts As smart as they are, the pros can’t remove all the bone-rattling bumps EE_C2BoomsBusts 9/29/11 6:28 PM Page 43 Q&A INTRODUCTION Both words in this chapter title discomfort governments, busts for obvious reasons.

Conservatives maintain that the best way to increase demand is to cut taxes and thereby put more money in the hands of businesses and consumers who will go out and spend it. Which side is right? Both. Government spending on highways, education, and other programs definitely creates jobs. When consumers get tax breaks, they are indeed more likely to replace their kitchen appliances or take longer vacations. Which method is more efficient, gets more money into the economy with more wallop? That’s a question of endless debate that will not be entered into here.

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