What are the two major problems associated with a recession? What is the major economic problem...
- What are the two major problems associated with a recession?
- What is the major economic problem during the expansionary phase of the business cycle?
Homework Answers
a) Two major problems associated with recession in the market is:
- lack of demand and fall in the price = at the time of recession the demand in the market is very low and that is because of the fall in the demand in the market this fall in the prices reduce the economic activities.
- Increase in the unemployment = Recession in the economy causes unemployment to rise as the inactivity in the economy increases.
b) Problems with expansionary phase = Increased inflation in the market , expansionary phase in the market causes inflation as the demand increases the supply and that causes inflation and a general fall in the purchasing power in the economy.
Over exploitation of the resources = At the time of expansion the resources in the economy are overexploited.
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What are the two major problems associated with a
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Full-employment output
An economic contraction
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Expansionary fiscal policy
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An increase in taxes and a decrease in government purchases
An increase in both taxes and government purchases
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