What is the relationship between GDP and economic recession?

What is the relationship between GDP and economic recession?

GDP, or Gross Domestic Product, measures a country's economic performance. A decline in GDP over two consecutive quarters often indicates a recession.

How does a recession affect GDP?

During a recession, economic activity slows down, leading to reduced consumer spending and investment, which typically results in a decrease in GDP.

Can you give examples of recent recessions and their impact on GDP?

Sure! The 2008 financial crisis led to a significant drop in GDP in many countries. Similarly, the COVID-19 pandemic caused a sharp decline in GDP globally.

What are the indicators of an impending recession?

Common indicators include rising unemployment rates, declining consumer confidence, and a decrease in manufacturing output.

How can governments respond to a recession?

Governments can implement fiscal policies like increasing public spending or cutting taxes, and monetary policies such as lowering interest rates to stimulate the economy.