Whether you are a trader or not, you may have the impression that the media will bring up “recession” again after a while, and sometimes even “depression” will appear at a later time. So what exactly is recession?
What is recession?
Economic recession refers to a period of economic stagnation or negative growth. Different countries have different definitions of recession, but the United States has widely applied negative economic growth for two consecutive quarters to define a recession. In macroeconomics, it is usually defined as ” in a year, the growth of a country’s gross domestic product (GDP) has declined for two or more consecutive quarters.” However, this definition has not been widely accepted by countries worldwide.
The impact of the recession
Unemployment is especially high during recessions. Many classical economists believe that there is a natural index of unemployment that can be used to subtract the real unemployment rate to calculate negative GDP gaps during recessions. In other words, the unemployment rate will never reach 0%.
The impact of a full-blown recession on employment could last for several quarters in a row. The United Kingdom’s research shows that low-skilled, low-educated workers and youth are the most vulnerable to unemployment during a downturn. After Britain’s Recession in the 1980s and 1990s, it took five years for unemployment to fall back to where it was before. Many businesses have been observed to experience sequential increases in employment claims during recessions.
In the early stages of a recession, productivity tends to fall and then rise again, weaker business changes their strategies, and the company’s profitability will increase sharply. Recessions also provided opportunities for anti-competitive mergers but negatively impacted the overall economy: such as the period when competition in the United States wore off led to prolonging the Great Depression of the 1930s.
People who live on wages and salaries are more affected by recessions than those who live on fixed incomes or benefits. Losing a job can negatively affect family stability and an individual’s health and well-being.
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1. First, click here to register an HXFX account for free.
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4. Click “Quote”, select the product you want to trade, then click “Trade”. Then you can click “Sell” or “Buy” to start your trading according to the trends.
5 advantages of foreign exchange trading
1. Leverage system
Investing a small amount of money will bring greater benefits, but may also bring greater risk of loss.
2. Low transaction costs
There are basically no handling fees, government taxes, etc.
3. Two-way transaction
Whether you are buying first and then selling in a bullish trend, or selling first and then buying in a bearish trend, you can get profit.
4. 24 hours trading
It is available in 24 Hours, investors can trade according to their own time.
5. High liquidity
In the foreign exchange market, investors could exchange foreign currency at any time, even complete their transactions in a short time.
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Disclaimer: Information above can only be use for references and doesn’t represent our platform’s opinions.