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In economics , a recession is a business cycle contraction that occurs when there is a general decline in economic activity. [1] [2] 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 ).
In the United States , a recession is defined as "a significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP , real income, employment, industrial production, and wholesale-retail sales." [3] The European Union has adopted a similar definition. [4] [5] In the United Kingdom , a recession is defined as negative economic growth for two consecutive quarters. [6] [7]
Governments usually respond to recessions by adopting expansionary macroeconomic policies , such as increasing money supply and decreasing interest rates or increasing government spending and decreasing taxation .
Chesed Direct - Welcome!
Chesed Direct - Welcome!