Question

What are the results when an economy retracts?

Answer 1

Answer:

An economic contraction is a decline in national output as measured by gross domestic product. That includes a drop in real personal income, industrial production, and retail sales. It increases unemployment rates. Companies stop hiring to save money in the face of lower demand.

Answer 2

With a fall in aggregate demand and lower economic growth, this puts downward pressure on prices. In a recession, you are more likely to see shops selling at a discount to sell unsold goods. Therefore, we tend to get a lower inflation rate. In the Great Depression of the 1930s.