Recession and Depression
According to the International Monetary Fund (IMF), a recession can cause an economy’s GDP to fall by 2% or up to 5%. On the other hand, depression can last too long and cause a GDP drop of more than 5%. However, depression can’t be defined by a particular set of clearly defined rules. The United States of America (USA) experienced 34 downturns between 1854-1980. Yet, not a single one of them impacted the US economy so severely, as The Great Depression of the early 20s does. Resulting in an all-time high unemployment rate of 25% and an 80% decline in nearly all major stock prices.
Recession: What it is and causes it?
Recession is one of the major factors that can disrupt the continuous economic growth of a nation. A large-scale, widespread economic downturn that hurts a nation’s economic growth is known as a recession. The standard rule of thumb is that an economy is said to be in a recession if it has a negative GDP for more than two consecutive quarters. However, even though this short period of recession, causes great damage to the country’s economy, as it results in unemployment, leading to increased poverty.
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