Posted on September 25, 2009 by Nayab Naseer

Recession is an economic condition marked by a slowdown in economic activities over a long period of time. During periods of recession, people would purchase less, and therefore production and profits would decrease, wages would remain stagnant or go down, jobs would disappear and these will have a cyclical effect resulting in even lesser spending and hence decreased economic activity.

Most of the recession in history has been preceded by stock market crashes. Many companies go bankrupt and job losses mount a the recession deepens.

It is usually the intervention of governments that helps the economy come out of recession. The government would increase the supply of money, spend more on infrastructure and other projects, and reduce taxes all with a view to add to the wealth of the people and thereby induce them to spend more, which would reverse the tide and increase sales and production, and thereby employment and wages