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What Is Written Here Is Not Investment Advice. It has been published on this page to explain the terminology used with explanations about the stock market, digital currencies, economy, finance and investment instruments.

🔍What is Recession?

  What is Recession?


A recession is a period of economic decline that lasts for at least two consecutive quarters, or six months. A recession is typically characterized by a decrease in gross domestic product (GDP), which measures the total value of goods and services produced in a country, as well as a rise in unemployment, inflation, and business failures.


Recessions can have various causes, such as a sudden shock to the economy (such as a pandemic, war, or natural disaster), a financial crisis (such as a stock market crash, a banking collapse, or a debt default), or a structural change in the economy (such as a shift in consumer preferences, technological innovation, or demographic transition).


Recessions can have significant negative impacts on individuals, businesses, and governments. Individuals may face reduced income, job loss, lower living standards, and increased stress and anxiety. Businesses may experience lower sales, profits, and investment, as well as higher costs and risks. Governments may face lower tax revenues, higher spending needs, and increased debt and deficits.


Recessions can also have some positive effects, such as creating opportunities for innovation, entrepreneurship, and social change. Recessions can also encourage more efficient use of resources, more prudent financial management, and more sustainable growth.


Recessions are inevitable in a market economy, but they can be mitigated by various policies and actions. Some of the common measures to prevent or reduce the severity of recessions include monetary policy (such as adjusting interest rates and money supply), fiscal policy (such as changing taxes and spending), and structural reforms (such as improving education, infrastructure, and institutions).


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