Topics: Macroeconomics, Economics, Unemployment Pages: 1 (307 words) Published: June 2, 2013
In economics, a recession is a business cycle contraction, a general slowdown in economic activity. Macroeconomic indicators such as GDP, employment, investment spending, capacity utilization, household income, business profits, and inflation fall, while bankruptcies and the unemployment rate rise. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock or the bursting of an economic bubble. Governments usually respond to recessions by adopting expansionary macroeconomic policies, such as increasing money supply, increasing government spending and decreasing taxation. Consumers are becoming less gloomy about the economy and the state of their own finances amid signs that the outlook for growth has started to improve. The monthly survey from the polling group GfK recorded a five-point jump in its confidence barometer in May, continuing its upward trend since the turn of the year. Consumer incomes remain under pressure at a time when prices are rising more rapidly than earnings, but the past month saw fears of a triple-dip recession dispelled by the release of Office for National Statistics (ONS) figures showing the economy had grown by 0.3% in the first quarter of 2013. The British Chambers of Commerce (BCC) said in a separate survey that it was raising its 2013 growth forecast from 0.6% to 0.9% as a result of the better-than-expected start to the year. It nevertheless urged George Osborne to use next month's spending review for 2015-16 to announce additional funds for infrastructure projects . As a result of such a wide-spread global recession, the economies of virtually all the world's developed and developing nations suffered extreme set-backs and numerous government policies were implemented to help prevent a similar future financial crisis.
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