Recession (Vocabulary: Business Terms)

RECESSION (Vocabulary: Financial Term)

In economics, a recession is a business cycle in which there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (demand). This may result from various events, including supply chain disruptions or natural or human-made disasters (like the recent pandemic). The U.S. defines recession 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."

• Governments may respond to recessions by increasing money supply, increasing government spending, or decreasing taxation.
• A depression is similar to a recession, but worse. It may last for years and affect several countries.

• View on Facebook or Instagram

(Image courtesy Wikimedia Commons; CTTO)