An economic recession is a period during which a country's economy slows down or contracts. This usually occurs when there is a drop in spending and investment, which leads to a decrease in production and trade. As a result, businesses may start to lay off workers or go out of business altogether, leading to higher levels of unemployment.
Many factors can lead to an economic recession, including a drop in consumer confidence, an increase in interest rates, a decrease in exports, or a reduction in government spending. In some cases, a recession may be caused by a financial crisis, such as a stock market crash or a banking crisis.
Recessions can have far-reaching effects on an economy, as well as on individuals and businesses. During a recession, people may see their incomes decrease, their investments lose value, and their ability to borrow money becomes more difficult. Businesses may also suffer, as consumers cut back on spending and companies struggle to maintain profits. In severe cases, a recession can lead to a depression, which is an extended period of economic contraction and hardship.
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