Question

What is inflation and recession?

Answer 1

Inflation

Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over some period of time. ... Often expressed as a percentage, inflation thus indicates a decrease in the purchasing power of a nation's currency

Recession

recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). ... In the United Kingdom, it is defined as a negative economic growth for two consecutive quarters.

Answer 2

In Macroeconomics,an inflation is usually identified as an overall rise in the average price level of all the goods and services in any country or economy.

A recession is a contractionary phase in the business cycle reflected by a general downfall of the economic activity or mobility in any country or economy.

Explanation:

• Inflation basically denotes a general increase in the overall price level of goods and services in any country or economy.
• Major causes of inflation in the economy includes increase in money supply or expansionary monetary policy by the central bank,increase in price of raw materials and productive resources used in final production of goods and services,increasing cost of businesses,natural calamities,rapid increase in property prices or value etc.
• Recession is a contractionary phase in business cycle in any country or country leading to a general halt in the national income,employment and GDP level of the country which affects the economic growth.
• Major causes of recession in the economy encompass various factors or attributes that adversely affect the aggregate demand or supply in the economy such as a reduction or stagnancy in aggregate consumption expenditure,aggregate capital or business investment,government or public expenditure,a rise in the price of the raw material or productive resources,large scale natural or biological calamity and so on.