Page 126 - Macroeconomics. book docx_Neat

- Price and wage controls (temporary)

3. ECONOMIC RECESSION AND STAGNATION

Meaning of Economic Recession

Economic recession is a period of declining economic activity characterized by falling

GDP, rising unemployment, and reduced investment.

Stagnation refers to slow or zero economic growth over a long period.

Causes of Recession

- Decline in investment

- Financial crises

- High interest rates

- Weak consumer confidence

- External economic shocks

Effects of Recession

- Rising unemployment

- Declining income

- Business failures

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