Professional Documents
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Recession,
we need to understand the
market
economy;
A] TWO STAGES OF MARKET ECONOMY
Usually, we think;
Demand = Quantity
But, here Demand = Price;
This is because,
Price decides the Quantity of Sales;
Competitive Price = More Demand;
Producer Price
In competitive Price = Less Demand;
Consumer Price
C] What is Recession?
DEPRESSION
E1] E2]
OVER PRODUCTION LOW CONFIDENCE LEVEL
E] Why Recession happens?
E1]
OVER PRODUCTION
Meals supplying company Demand for other goods Started saving money
got the hit come down instead of spending
Producers; Consumers;
Can produce and Can decide to
sell at their prices buy or not;
Both Producers and Consumers are free to act; Not a forced action
G] How to come out of recession?
Hence, Government does not have direct control on P
Consumers behavior; But, they can influence millions of
Consumers with Governments policies;
More money
1] Reduce reserve
available for bank
ratio
to give loans