What is a recession?

From the TV screens often sound words and terms, the concepts of which are unknown to many of our fellow citizens. For example, how many people know and can explain what a recession is?

In the free encyclopedia it is written that the termrecession means a moderate decline in production or a slowdown in economic growth that is not critical. At the same time, there is a lack of growth in GNP (gross national product) or its fall for a long time, at least six months.

In a more understandable sense, recession means that production reduces output, which means lower profits.

For the first time the term "recession" was used by Americaneconomists. This happened during the Great Depression, when the productivity of agriculture, activity in various industries and in trade fell.

The recession usually leads to massive fallsstock indices. The recession in the economy of one state is directly related to the economic situation of another. For example, a recession in the US leads to a drop in economic activity in other countries.

Economists call the signs of a beginning recession a sharp surge in rising energy prices and an increase in unemployment.

As an economic phenomenon, the recession is divided into three types:

  1. The recession is due to unplannedshocks in the market sphere, for example, because of the outbreak of armed conflict. The main negative feature is the unpredictability of the current economic situation in the country and further results.
  2. The manifestation of a recession leads to a decrease in the level of confidence among consumers, or businessmen and investors have a lack of confidence in the political power in the country.
  3. The recession results from the loss of balance in the country's economy, the rapid growth of external debt and the drop in quotations.

This is a short answer to the question of what a recession is.

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