What is it in economics, what is the recession?

Recession is a decrease of less than 10% in the gross domestic product of the country (GDP). The reduction must take more than one consecutive quarter of a year. GDP is defined as the sum of private expenses and government expenditure on goods, services, work and investment.

The conditions of recession and depression are often confused. It can be said that the recession is generally not as serious as depression. The recession tends to solve faster.

Not everyone agrees with a specific definition of economic recession, but most of them can point to several factors, which can cause a recession. There may be a significant decline in prices, or significant prices may increase. The drop suggests that people can spend less money, so GDP will decrease. Increase in price can also reduce private and public expenses and thus reduce GDP. This is the built -in or endogens factor of the company. Expenditure and consumption will increase and reduce as well as prices. However, another factor is needed to induce recession in addition to these occasional built -in dropsAjech. Usually something changes quickly and causes a sharp increase or decrease in prices.

The recent recession at the beginning of 2000 was caused by a sudden reduction in the activity of the DOT.com industry. In the age of 90, the telecommunications industry earned a huge amount of money and began to exceed its expectations in terms of assessment of future demand. Suddenly the demand was much lower than expected, which led to mass redundancies, reduction of production and thus to a decrease in expenditure.

Dot.com's fall is considered to be a "shock" in GDP, which may fall sharply if the product or industry falls into production and expenditure. Although the recession resulting from Dot.com bust was considered until 2003 has the far -reaching consequences that are still felt.

those who initially earned excessive money can still find themselves without work. Telecommunications companies significantly reduced jobs and rates employmentThe nations in this industry have never been fully restored. Telecommunications companies also reduce the costs of outsourcing production in foreign countries. Although this outsourcing allowed some companies to continue operation, many people have left training for specific jobs that they could no longer perform.

but other industries have since spread and increased GDP. The recession is therefore called, although many still feel its effects on the personal level. Restricting recession as "via" does not necessarily represent positive economic changes for individuals.

For example, the recession is sometimes evaluated in terms of the country's unemployment rate. When this is the case and people find jobs, the inability to evaluate the income changes can make the economy Aphruška more productive than it really is. A former telecommunications employee who is now working in Wal-Mart can have a job, but this work is not an equal former work in compensation. Analysis of only one aspect of recession should not beused to indicate an economic recovery.