Question by jeeby: Causes of recession?
What is the cause of the most current recession?
Ideal answer:
Answer by Indiana Frenchman
recession happens when there is a fall in financial development for 2 consecutive quarters, nevertheless if development is extremely low there will be improved spare capacity and men and women will really feel there is a recession, this is at times recognized as a development recession.
If there is a fall in AD then according to Keynesian analysis there will be a fall in Genuine GDP. The effect on Genuine GDP depends upon the slope of the AS curve if the economy is close to full capacity reduce AD would only lead to a tiny fall in Real GDP.
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