Recessions are typically caused by a combination of factors, including a decline in consumer and business confidence, reduced consumer spending, higher interest rates, and external shocks such as oil price spikes or financial crises. During a recession, a country's output often falls due to decreased demand for goods and services, leading to higher unemployment and lower business investment. Once a recession has ended, the economy may experience a recovery phase where output begins to rise again as consumer confidence returns and spending increases. Prices may remain stable or even decline in the short term due to lingering excess supply, but as the economy improves, inflation can gradually increase as demand picks up. Ultimately, the economy may stabilize and move toward a new growth trend.
What are the causes of a recession? What happens to a county's output and prices after a recession has ended? Write 3-5 sentences. (4 points)
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