Resource Markets

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Housing Starts

A rise in housing starts occurs when the demand for new housing increases. Many resources serve as inputs in the construction of new residential housing, and a rise in the demand for new housing will generate a proportionate rise in the derived demand for construction inputs. Because of the cyclical nature of residential construction, the resource markets that serve as inputs to the residential construction industry are also highly cyclical, and can experience wide swings in demand throughout the business cycle.

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Labor Productivity

The labor market represents one of the most important examples of a resource market. Economic theory suggests that, all else equal, rising labor productivity will increase the demand for labor and consequently increase equilibrium wages and salaries.

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