Th2.5: Characteristics of a Recession Flashcards
1
Q
When the economy is at the bottom of the cycle, it is in a…
A
slump, trough, depression or recession
2
Q
What does there tend to be during a recession?
A
high unemployment causing low consumption, investment and imports
3
Q
What will inflationary pressure be like during a recession?
A
low and there may even be deflation
4
Q
In the UK, how does the government define a recession?
A
where real GDP falls in at least two consecutive quaters
5
Q
As the economy moves out of a recession, it moves into…
A
a recovery / expansion phase as national income and output begin to increase with unemployment falling and consumption, investment and imports increasing
6
Q
What happens to inflationary pressure as we move into recovery?
A
begins to grow as workers start to demand higher wages
