explain the short run consequences of a recession on consumption, investment, output and employment.

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explain the short run consequences of a recession on consumption, investment, output and employment.

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A recession is an economic phenomenon where the economic growth is considerably reduced and there is widespread unemployment and decreased output.

A recession results in fall in income. Consumption depends on income and so during a recession, consumption falls.

During recessions, the return on investment is very low due to low economic activities and lower profit opportunities. Thus during recession, investment also falls.

Due to recession, there is widespread unemployment in the economy. The resources in the economy become idle and hence output is also reduced. Thus a recession is marked by low output and high unemployment.

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explain the short run consequences of a recession on consumption, investment, output and employment.

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explain the short run consequences of a recession on consumption, investment, output and employment.

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