Why recession hits countries ?
A recession is a significant decline in economic activity that lasts for an extended period of time, typically characterized by a decrease in Gross Domestic Product (GDP), rising unemployment, and reduced consumer and business spending. There are several reasons why a recession may occur: 1. Business Cycles: Recessions are a natural part of the business cycle, which is the pattern of economic growth and contraction that occurs over time. The economy tends to go through periods of expansion, followed by a slowdown or contraction. 2. External Shocks : Recessions can be triggered by external shocks, such as a financial crisis, a major natural disaster, or a geopolitical event. These shocks can disrupt economic activity and lead to a decline in consumer and business confidence. 3. Monetary Policy: Central banks can also contribute to recessions by tightening monetary policy too much in an attempt to control inflation. This can lead to higher interest rates, reduced lending, and a de...