A n economic recession signifies a drop in the gross domestic product (GDP), while a slowdown is merely a decline in the growth rate of the GDP. It’s the difference between a salary cut and a smaller increment. While one reduces an individual’s actual income, the other is merely a drop in the growth of that income. A slowdown usually precedes recession, but does not necessarily lead to one. RECESSION: The GDP is the total value of all the goods and services produced or created in a country in a year. When this value falls, the country’s economy is said to be in recession. It means that the country is producing and earning less than what it did, say, six months ago. An economic recession is marked by low consumer spending because people lose confidence in the growth of the economy. This decrease in the demand for goods and services, in turn, leads to a decrease in production as companies reduce the output to match the demand. This also leads to lay-offs and a ...
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