ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -An economic contraction happens when domestic output, such as GDP decreases. It leads to a decrease in other areas, such as individual income, production, and sales.

Detailed explanation-2: -When an economy enters into contraction, real gross domestic product (GDP) growth slows and unemployment rises. A contraction often leads to economic hardship for many people.

Detailed explanation-3: -A contraction is a period when economic output declines. During this phase, the economy is producing fewer goods and services than it did before. When fewer goods and services are produced, fewer resources are used by firms-including labor.

Detailed explanation-4: -If GDP is falling, then the economy is shrinking-bad news for businesses and workers. If GDP falls for two quarters in a row, that is known as a recession, which can mean pay freezes and lost jobs.

Detailed explanation-5: -During an economic expansion, economy-wide employment, incomes, industrial production, and sales all tend to increase alongside the rising real GDP.