The phase in the business cycle that Russia is in is Prosperity.Prosperity is the high point of the business cycle. The Gross DomesticProduct is 796 billion dollars. Russia is partners with Germany inexporting and importing. The number of imports is 33 billion and thenumber of exports are 66 billion. The National Budget is 56.
6 billiondollars. They have 1 radio per 2.9 people. They also have 1 Telephone per5.9 people. Russia’s education is free and compulsory through ages 7 to17. The unemployment rate is 8 percent. The inflation rate is 85 percentand possibly more if monetary policy is relaxed.
Russia was mostly anagricultural country until the late 19th century, when industrializationbegan, in European Russia. Economic development was then interruptedby World War 1 and the Civil War that followed. Modern developmentwas initiated by Stalin, whose frantic industrialization drive in the 1930’smade the Soviet Union an industrial giant.
Under Stalin and hissuccessors, the less settled frontier regions of Central Asia and Siberia weredeveloped. Several of the world’s largest dams were built on in the formerSoviet Union, and the world’s first atomic station was opened in 1954. Bythe 1980’s about 40 nuclear reactors were operating in the Soviet Union.In the late 1970’s the economic backwardness of the Soviet Union hadbecome so self evident that no amount of political propaganda couldobscure it.
Western developed countries began to enter the InformationAge, introducing new communication technologies and electronic linksamong institutions and individuals. The Soviet Union still relied on therigid planning and pervasive controls, leaving no room for initiative andinventiveness. When Mikhail Gorbachev became head of the party in1985, the huge country began to move.
Gorbachev surrounded himselfwith a number of reform-minded economists and soon formulated themain pillars of economic restructuring called perestroika. The major goalsof perestrioka were to make Soviet enterprises more self-governing and togive them more freedom, while at the same time, more responsibility fortheir performance. In the planned economy before perestroika, allenterprises were totally dependent on central planners, who determinedwhere to buy materials, what to produce, and where to sell it. This systemencouraged inefficiency, because the companies did not have to competewith any other companies. In addition since the workers could not befired , they did not work very hard. A number of new laws were made toproclaim that it was possible for individuals or small groups to start theirown enterprises.
Restaurants, taxis, recycling centers and repair shopswere opened in many places, but party bureaucrats often hampered thesenew initiatives. Another goal of peresroika was to fight against cheapproducts. Better quality control was introduced in many companies, butit was often resented by workers and led to drops in production (Whichwould be recession.)