ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A recession can be defined as a sustained period of weak or negative growth in real GDP (output) that is accompanied by a significant rise in the unemployment rate. Many other indicators of economic activity are also weak during a recession.

Detailed explanation-2: -A recession is a period of economic decline, signaled by an increase in unemployment, a drop in the stock market, and a dip in the housing market.

Detailed explanation-3: -How Do Recessions Affect Investors? Typically during the early part of a recession, the stock market has negative returns. This is often because of the negative sentiment around poor or lackluster corporate earnings. But the stock market will often recover before the recession is over.

Detailed explanation-4: -Instead, both official determinations of recessions and economists’ assessment of economic activity are based on a holistic look at the data-including the labor market, consumer and business spending, industrial production, and incomes.

Detailed explanation-5: -Economic recessions can be caused by many different elements, including loss of consumer confidence, high interest rates, a stock market crash, and asset bubbles bursting. Most events that will cause the economy to slow down can also lead to a recession if left unchecked.