ACCORDING TO THE OXFORD DICTIONARY RECESSION MEANS =

A TEMPORARY ECONOMIC DECLINE DURING WHICH TRADE &

INDUSTRIAL ACTIVITY ARE REDUCED.

RECESSION IS DEFINED ASA recession is when GDP growth slows,

businesses stop expanding , employment falls , unemployment rises , and housing

prices decline.

Before understanding “Recession”, We need to understand the Market Economy;

A) TWO STAGES OF MARKET ECONOMY

B) TWO FACTORS OF MARKET:- DEMAND & SUPPLY

1. Two Stages Of Market Economy

A) GROWING MARKET ECONOMY

B) DECLINING MARKET ECONOMY

A) GROWING MARKET ECONOMY

B) DECLINING MARKET ECONOMY

B) Two Factors Of Market:- Demand & Supply

Producer wants his demand always to be HIGHConsumer wants his buying cost always to be LOW

Producer Price

Consumer Price

Actually, Demand is the price at which consumer is ready to buy and producer is ready to sellUsually, we think;Demand = QuantityBut, here Demand = Price;This is because,Price decides the Quantity of Sales;Competitive Price = More DemandIncompetitive Price = Less Demand;

B) Two Factors Of Market:- Demand & Supply

C) What is Recession?

Recession is the economy shrinking for two consecutive quarters (=6months) with a decrease in the GDP (=Gross domestic Product)GDP = Value of all the reported goods and services produced by people operating in the country.

GDP = MONEY VALUE OF { C+I+G+(X-M)}

C = Consumables, I = Gross Investments, G = Government spending, X = Exports, M = Imports

If GDP is growing, then market is growing due to increased Demand.

C) What is Recession & Depression?

There is a joke that economists quote to explain the Difference Between “Recession & Depression”

RECESSION

= When Your Neighbor Loses His Job

DEPRESSION

= WHEN YOU LOSE YOUR JOB

BASIC DIFFERENCE BETWEEN RECESSION & DEPRESSION

RECESSION is a general slowdown in economic

activity over a sustained period of time, or a business cycle contraction

If the GDP of a country drops by at least 10% then

this can be classed as a DEPRESSION. By these

standards, the last depression America

suffered was The Great Depression in the 1930's.

HOW TO KNOW RECESSION?

People buying less stuff.Decrease in factory production. Growing unemployment. Slump in personal income. An unhealthy stock market.

STEPS TO BE TAKEN BY THE GOVERNMENT TO STOP RECESSION

Control Inflation

Encourage Savings

Ensure Peaceful Atmosphere Conducive To Businesses

Encourage Exports

Encourage Imports of High-Priced

Commodities

Reduce Government Expenditure And Focus On Infrastructure Development

Discourage Borrowings If Inflation Is Ruling High

Encourage Foreign Direct Investments

Steps Needed To Be Taken By Companies To Stop Recession

NEW Innovation

Cut Down Expenses

Provide New Employment

Opportunities If Not Suffering

From Recession

Offer Attractive

Selling Incentives

Steps Needed To Be Taken By Individuals And General Public To Stop Recession

Work More

Pay Your Debts First

Settle On Any Job If You’ve Been Given A Pink Slip On The Current One

Concentrate On Saving A Penny To Stuff Your Piggy Bank

Pay Taxes Promptly

Buy Assets

HOPING THIS TIMERECESSION VANISHES

SOON SO THATINDIA GETS BACKTO ITS STRONGER

GDP GROWTH RATEOF 8% TO 10%