Natural Disasters Effect on Economics Essay

315 Words2 Pages
When there is any kind of natural disasters like, hurricane, flood, blizzard, forest fire, etc. than, both government and free enterprise is best to handle a disaster. Government alone can provide the big resources and protection, but volunteers and private industry, put feet and feelings to helping others. The free market system consists of the private sector owning the majority of the resources, while the government’s main task is to facilitate or basically help economic activity. When a disaster strikes infrastructure and other aspects of a stable economy like labor and supplies are distributed. The government’s main task will be to rebuild Infrastructure and help in the private sector with tools such as grants…etc. Once this is done the private sector which is very efficient and profit motivated will quickly begin to regenerate itself. Once infrastructure and business have been rebuilt the production capability of the economy will increase. Due to the access of government aid demand for goods and services will increase. The increase in demand for goods and services will increase the demand for factors of production. Later on, the economy will be able to function without government aid. The government helps the economy recovery through investment aid and lets the private sector decide on the economic questions of why, how and how much to produce based on demand and supply. Command economics where the government plays a major role are relatively weaker in a response to a disaster. This is because all production activities are controlled by the government. The government usually has a long-term plan for production. Command economies have relatively inflexible production systems. The government will have to rebuild the infrastructure and recess the demand and supply for goods and services. This is an extremely difficult and time consuming task. Given the
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