What is a recession?
A recession is a significant decline in economic activity spread across the economy, lasting more than a few months. It is visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. The depths of recessions are measured by their duration and intensity.
A recession generally occurs when there is a widespread drop in spending. This can be triggered by several factors, including:
-A sharp increase in the cost of energy or other commodities
-A sudden tightening of credit conditions
-A natural disaster
a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.
In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock, the bursting of an economic bubble, or a large-scale anthropogenic or natural disaster (e.g., a pandemic).
How do recessions affect our lives?
Recessions can have a major impact on businesses and households. They can lead to layoffs, bankruptcies, and a decrease in consumer spending. This can cause a ripple effect throughout the economy, leading to even further decline.
While recessions are often associated with negative outcomes, they can also lead to some positive changes. For example, a recession may cause businesses to streamline their operations and become more efficient. It can also lead to lower prices for consumers.