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Recession, Depression, Inflation, Stagnation?: Economics Concepts Which Matter
By zadmed | EducaEco | 27 Jan 2021
1. Recession: A recession is, generally, defined, as a period, of temporary economic/ financial decline, when, trade, industrial activities, and other economic indicators, are identified, in, at least, two consecutive quarters. It is usually reviewed, in terms of, the Gross Domestic Product, or, GDP, which measures, overall economic performance, in a specific nation. Often, the Federal Reserve Bank, uses several tools/ methods, to attempt to enhance activity, including reducing interest rates, etc.
2. Depression: When, the recession, becomes, even more severe, and endures, for a significantly, extended period of time, it is often, considered, a depression. We might witness, either, a specific component of the economy, which is depressed, such as housing, or industry - specific, or, an overall one. Nearly, everyone, is familiar, with the period, which began in 1929, and extended, for several years, which is referred to, as, the Great Depression.
3. Inflation: Inflation is the rate at which, a specific (or several) currency, falls, and, results, in an overall, rise in most prices of products, and services. The usual pattern, of the Federal Reserve Bank, is, to increase the costs, of borrowing money, also referred to, as interest rates. In most cases, when these increase, significantly, many individuals discover, their wages, do not keep up, with the inflation rate!
4. Stagnation: When we refer to, stagnation, in economic/ financial terms, it refers to a significant period of little, or lack of activity, growth, and/ or, meaningful development! When, this occurs, for a prolonged period of time, it generally, creates a loss of employment possibilities, and, often, more unemployment. Historically, governments use a variety of economic stimuli, to strengthen, overall economic activity, and hopefully, restore us, to a stronger, better, financial condition.
When it comes to money - matters, the more, one knows, the better - off, we might be, in being prepared, for eventualities. Learn as much as you can, for you own best interests.
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