ON ONE OF THE HOTEST TOPIC

THAT AFFECTS NATION

SERVES AS A COMMON COLD FOR THE COMPANIES

IT WHAT HAPPENS WHEN YOUR NEIGHBOUR LOSES HIS

JOB

THAT’S NAMED

RECESSION

RECESSION

THERE ARE TWO STAGES IN MARKET ECONOMY

1.Growing Market Economy2.Declining Market Economy

Growing Market Economy

Declining Market Economy

There are Two Fctors that Affects The Market

1. DEMAND2. SUPPLY

------------Producer Price -----------Consumer Price

“ SO, WHAT IS RECESSION? “

RECESSION IS THE ECONOMY SHRINKING FOR TWO CONSECUTIVE QUARTERS

(6MONTHS) WITH A DECREASE IN THE GDP (GROSS DOMESTIC PRODUCT)

WHAT IS GROSS DOMESTIC PRODUCT ?

GDP IS A GOOD INDICATOR OF ECONOMYOTHER INDICATORS COULD BE: -UNEMPLOYMENT RATE -CONSUPTION RATE -ACTUAL PERSONAL INCOME

“

”IF GDP IS GROWING,THE MARKET IS GROWINGDUE TO INCREASED DEMAND

WHY DOES RECESSION HAPPEN?

1. OVER PRODUCTION: A SITUTION IN WHICHIN WHICH SUPPLY EXCEED THE NATION’S ABILITYTO CONSUME WHAT HAS BEEN PRODUCED.(I.E)WHEN SUPPLY >DEMAND

2. LOW CONFIDENCE LEVEL IN THE CONSUMERS: THE CONSUMERS LOSE THEIR CONFIDENCE IN THE COMPANY AND SELL SELL THEIR SHARES. THEY ALSO FEAR THATTHEY MAY LOSE THIR JOBS AND EVENTUALLY HAVE LESS CONFIDENCEINSPENDING MONEY.

RECESSION DUE TO ASSIGNABLE CAUSE

RECESSION ALSO OCCURS DUE TO BAD INCIDENTS SUCH AS THREATS AND RUMOURS THAT LEAD INTO A KIND OF WAR.EXAMPLE: SEPTEMBER 11 TERRORIST ATTACK IN US, INTERNATIONAL AIRPORT BLOCK IN THAILAND, MUMBAI ATTACKED IN INDIA.

SEPTEMBER 11 TERRORIST ATTACK IN US CREATED FEAR IN PEOPLE PEOPLE CANCELLED THEIR TRAVEL PLAN RESULTED IN LOW OCCUPANCY RATE AIRLINES &HOTEL INDUSTRIES BADLY HIT AIRLINES &HOTEL INDUSTRIES OFFERED

DISCOUNT, GIFT COUPONS, TO ATTRACK PEOPLE

BUT STILL NO IMPROVEMENT IN OCCUPANCY RATE AIRLINES &HOTEL INDUSTRIES STARTED “COST REDUCTION” ACTIVITES.

INDICATORS TO SAY NATION IS IN RECESSION

PEOPLE BUYING LESS STUFF DECREASE IN FACTORY PRODUCTION GROWING UNEMPLOYMENT SLUMP IN PERSONAL INCOME AN UNHEALTHY STOCK MARKET.

“AS SURE AS THE SPRING WILL FOLLOW THE WINTER,PROSPERITY AND ECONOMIC GROWTH WILL FOLLOW RECESSION.” -BO BENNETT