DEMAND SIDE POLICIES

758 WD

Every few years, countries experience some economic downturns, also known as a recession. Companies begin to lay off workers, consumers stop spending money, and the average person is put into a financial bind. A recession is defined as a significant decline in activity across the economy, lasting longer than a few months. (Investopedia) More easily put, it’s a big drop in consumer spending that results in loss of jobs, income and business profits. Which results in more bankruptcies, both personal and business, and higher unemployment rates because there are too many people chasing the few jobs that are available. A recession generally lasts about 6 to 18 months, and interest rates usually fall during these months to stimulate the economy. In general, a recession will end when the economy starts to grow usually for 2 or more business quarters. This means that companies are hiring again, consumers