A recession is a period of economic contraction characterized by a significant decline in economic activity. During a recession, there is a widespread decrease in spending, production, and employment, resulting in a decline in the overall economy. Typically, a recession is marked by a decline in the Gross Domestic Product (GDP) of a country or region for two consecutive quarters.
Recessions can be caused by a variety of factors, including changes in interest rates, government policies, and fluctuations in consumer and business confidence. They can have a significant impact on individuals, businesses, and governments, leading to increased unemployment, reduced incomes, and decreased tax revenues.
Governments and central banks often implement measures to counteract the negative effects of a recession, such as lowering interest rates, increasing government spending, or providing stimulus packages to help support businesses and individuals.