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Q.

What is recession ? what is inflation ?

Tags: money, education, inflation
Asked by sitapati rao, 03 Nov '09 05:17 am
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Answers (6)

 
1.

Recession and inflation are the two big bogeymen that keep Federal Reserve bank alert.The job is to keep interest high enough to tame inflation without causing a recession. Steering between the two is a lot harder than it looks.
A recession is when the economy stops growing and goes into reverse. Instead of adding new jobs, there are fewer jobs. Instead of companies making more money than the year before, they make less. Consumers spend less because more of them are out of work. Companies sell even less stuff, make less money and around it goes.
A recession is when the economy stops growing and goes into reverse. Instead of adding new jobs, there are fewer jobs. Instead of companies making more money than the year before, they make less. Consumers spend less because more of them are out of work. Companies sell even less stuff, make less money and around it goes.
Usually, recessions correct themselves when interest rates go down. Rates go down when there's less demand for borrowing ...more
Answered by inquisitive, 03 Nov '09 06:00 am

 
  
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2.

Putting it in simple way, When Money Supply in the markets is more for any reason, it is Inflation, causing more people as buyers and the Demand outstriping the Supply, causing a Rise in Prices. But at the same time it stimulates Production, Work Opportunities, salaries and so on. The Govt. has to keep check on undue rise in money supply in form of floods so People are lured by Tax exemptions in lieu of Savings. On the other hand when the Money supply is less the Supply outstrips Demand. The Production gets dumped, the work opportunities are reduced, employees are fired, the industrial and market demands are reduced. This is Recession. The process is Cyclic, one leading to another if checks and counterchecks are not provided requiring a regulatory authority in the form of a Central Bank, in our country it is Reserve Bank of India, which regularly keeps on declaring various norms of Liquidity, Lending Rates etc.
Answered by subhash tiwari, 03 Nov '09 07:41 am

 
  
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3.

WHEN PRICES rose in India, recession erupted worldwide. Unlike most countries in the world, India, Brazil and China are not facing a very difficult situation. Inflation has risen although the after-effects of recession haunt the country. Let us now come to the basic theme of this Paper. The theme is centred on inflation and recession. Let us briefly define these concepts before we analyse the issues linked to these. Inflation is understood as a process of steadily rising prices, resulting in diminishing purchasing power of a given nominal sum of money. Recession is a state of the economy where there is unemployment but it is of short duration unlike depression, which is characterised by long duration. Inflation is either demand-pull or cost-push in nature.
Answered by anil garg, 28 Dec '09 04:43 pm

 
  
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4.

In economics, a recession is a general slowdown in economic activity over a long period of time, or a business cycle contraction.[1][2] During recessions, many macroeconomic indicators vary in a similar way. Production as measured by Gross Domestic Product (GDP), employment, investment spending, capacity utilization, household incomes, business profits and inflation all fall during recessions; bankruptcies and the unemployment rate rises. Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the price level rises, each unit of currency buys fewer goods and services; consequently, inflation is also an erosion in the purchasing power of money a loss of real value in the internal medium of exchange and unit of account in the economy A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time
Answered by Deepak Joshi, 11 Nov '09 06:16 pm

 
  
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5.

In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.[1] When the price level rises, each unit of currency buys fewer goods and services; consequently, inflation is also an erosion in the purchasing power of money a loss of real value in the internal medium of exchange and unit of account in the economy.[2][3] A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time.[4]

Inflation can have positive and negative effects on an economy. Negative effects of inflation include loss in stability in the real value of money and other monetary items over time; uncertainty about future inflation may discourage investment and saving, and high inflation may lead to shortages of goods if consumers begin hoarding out of concern that prices will increase in the future. Positive effects include a mitigation of economic recessio ...more
Answered by saranathan Narasimhan, 04 Nov '09 04:14 pm

 
  
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6.

Great Recession, then Great Inflation?

by Mark Thirlwell - 4 June 2009 6:09PM

The bond market vigilantes are back, and theyre worried about inflation. (Although see Menzie Chinn for some perspective.) Germanys Chancellor, Angela Merkel, is worried too, recently expressing her alarm at policies being pursued by the Fed and the Bank of England, and even by the more cautious ECB. China, meanwhile, is nervous about the value of its US investments and is expressing doubts about the future of the greenback. And Ben Bernanke is taking the bond markets jitters to heart and is stressing the need to manage long-term fiscal sustainability.

Do burgeoning levels of public debt and quantitative easing by central banks herald an inflationary future?

At first and actually at second glance, worrying about inflation right now seems pretty strange. After all, havent we just seen dramatic falls in activity across much of the developed world (at least, outside Australia)? Remember, the US ec ...more
Answered by radhakrishnan, 03 Nov '09 07:56 am

 
  
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It has to be seen when rthe recesson will be completed. it is said that it can end within three to four months or during 1st month of next year...more

Answered by Gopal