What is Recession?

Published: Tuesday, August 9, 2011, 13:58 [IST]
 
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What is Recession?

What is Recession?

The term recession is used when two or more consecutive quarters of GDP growth is in the negative.

GDP is the acronym of Gross Domestic Product, it is a measure of production. While India's GDP growth had peaked at 9% and it fell to 6%, then its a slowdown but for a country like US where GDP growth rate is 1% and it falls to -0.6% and stays there for two consecutive quarter at that level then US will officially be in recession.

Production for a country is measured by Gross Domestic Product (GDP): employment, investment spending, capacity utilization, household incomes, business profits, and inflation. During recession all of these production indicators fall, meanwhile bankruptcies and the unemployment rate rise.

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