Top 5 major Economic Effects of Recession on Economy

Posted by on August 1, 2009 in World Economy

There is a general economic decline during recession. The economy has a tremendous setback. The purchase of the people comes down due to low salaries or lack of sufficient income. This results in slump in market with goods and services not being availed of by people. Production slows down and in turn prices go up. In fact during recession, many firms are forced to sell their products at throw-away prices and suffer from losses as a result.

Recession is something to be dreaded by producers as well as consumers. Both suffer during these hard times. Both need each other. In case, consumers do not have the purchasing power, then production suffers. Less production means less profits for producers who will find it difficult to run their business houses.

The economic scenario during recession is pathetic. It is interesting to note how the economy suffers during such traumatic times as it affects us all.

Recession impact on the economy

Recession is definitely bad for economic growth and development. It slows down the economy. Investors hesitate to invest, and producers are unable to churn out products. Consumer lack the necessary money due to unemployment and cannot therefore buy goods available in the market.

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  1. Simran Shayal

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    Thank you,
    Simran Shayal


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  2. Bailey Maobu

    Hello, I would just like to say thank you for posting this. I will be using this for essay on the recession.

    Thank you again,
    Bailey Mabou


  3. hi,
    thanks for the info i used it for my study material is very clear n nice!!
    thank you


  4. Curious Lass

    Is there a positive effect of the recession?


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