As a clinical instructor who has taken students to a variety of local facilities such as nursing homes, rehab facilities and city hospitals, I've learned how to sail smoothly through some occasionally very choppy waters. Portal of Entry.
In economics, a recession is a business cycle contraction. It is a general slowdown in economic activity. Macroeconomic indicators such as GDP (gross domestic product), investment spending, capacity utilization, household income, business profits, and inflation fall, while bankruptcies and the unemployment rate rise.Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). recession has many attributes that can occur simultaneously and includes declines in component measures of economic activity (GDP) such as consumption, investment, government spending, and net export activity.
Suppose the economy experiences an output gap whereby equilibrium GDP = 8800 and Potential GDP = 9000. This is a recessionary gap, because the equilibrium GDP is less than the Potential GDP. Our desire is to close the gap, and in order to do so, we will chose some type of fiscal policy.That is, we will either change taxes or government spending in order to close this recessionary gap of 200.ur desire is to close the gap, and in order to do so, we will chose some type of fiscal policy. That is, we will either change taxes or government spending in order to close this recessionary gap of 200.