PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
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Chapter 12, Problem 1RQ
To determine

Describe recession and expansion.

Expert Solution & Answer
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Explanation of Solution

When the economy is reach it peaks, the economic activities reach its heights. Then it begins to fall. In the period of recession, the economic activities go in a slow motion. This is because of the decreased employment, productivity, and money growth. However, the economy will survive the situation through the adoption of macroeconomic policies. Then the economic activities improve better than the recession period. Thus, it can be said that the beginning point of recession is a peak and it ends at the trough situation. Then the economy gradually moves to the expansion stage. In the post war period, due to the adoption of many policies, Country U entered in to an expansionary phase. Also an expansionary stage has been longer on average than a recession.

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