15. WHAT IS GROSS DOMESTIC PRODUCT ?
GDP IS A GOOD INDICATOR OF ECONOMY
OTHER INDICATORS COULD BE:
-UNEMPLOYMENT RATE
-CONSUPTION RATE
-ACTUAL PERSONAL INCOME
16. “
”
IF GDP IS GROWING,
THE MARKET IS GROWING
DUE TO INCREASED DEMAND
17. WHY DOES RECESSION HAPPEN?
1. OVER PRODUCTION:
A SITUTION IN WHICHIN WHICH SUPPLY EXCEED THE NATION’S ABILITYTO CONSUME WHAT HAS BEEN PRODUCED.
(I.E)WHEN SUPPLY >DEMAND
2. LOW CONFIDENCE LEVEL IN THE CONSUMERS:
THE CONSUMERS LOSE THEIR CONFIDENCE IN THE COMPANY AND SELL
SELL THEIR SHARES.
THEY ALSO FEAR THATTHEY MAY LOSE THIR JOBS AND EVENTUALLY HAVE LESS CONFIDENCEIN
SPENDING MONEY.
18. RECESSION DUE TO ASSIGNABLE
CAUSE
RECESSION ALSO OCCURS DUE TO BAD
INCIDENTS SUCH AS
THREATS AND RUMOURS THAT LEAD INTO A KIND OF WAR.
EXAMPLE:
SEPTEMBER 11 TERRORIST ATTACK IN US,
INTERNATIONAL AIRPORT BLOCK IN THAILAND,
MUMBAI ATTACKED IN INDIA.
19. SEPTEMBER 11
TERRORIST ATTACK IN US
CREATED FEAR IN PEOPLE
PEOPLE CANCELLED THEIR TRAVEL
PLAN
RESULTED IN LOW OCCUPANCY RATE
AIRLINES &HOTEL INDUSTRIES BADLY
HIT
AIRLINES &HOTEL INDUSTRIES OFFERED
DISCOUNT, GIFT COUPONS, TO ATTRACK
PEOPLE
BUT STILL NO IMPROVEMENT IN
OCCUPANCY RATE
AIRLINES &HOTEL INDUSTRIES STARTED
“COST REDUCTION” ACTIVITES.
20.
21. INDICATORS TO SAY NATION IS IN RECESSION
PEOPLE BUYING LESS STUFF
DECREASE IN FACTORY PRODUCTION
GROWING UNEMPLOYMENT
SLUMP IN PERSONAL INCOME
AN UNHEALTHY STOCK MARKET.
22.
23. “AS SURE AS THE SPRING WILL FOLLOW
THE WINTER,
PROSPERITY AND ECONOMIC GROWTH
WILL FOLLOW RECESSION.”
-BO BENNETT