Posted April 6, 200916 yr What is a recession? A recession is a decrease of less than 10% in a country’s Gross Domestic Product (GDP). The decrease must last for more than one consecutive quarter of a year. The GDP is defined as the sum of private spending and government spending on goods, services, labor and investment. The terms recession and depression are often confused. It can be said that a recession is in general not as severe as a depression. A recession tends to resolve more quickly. Not everyone agrees on a specific definition for determining an economic recession, but most can point to several factors, which can cause a recession. Either significant drop in prices, or significant increases in prices can occur. A drop indicates that people may spend less money, thus the GDP is decreased. An increase in price may also reduce both private and public spending and thus decrease the GDP. In some ways, it is quite natural for countries to experience mild recessions. This is a built-in or endogenous factor of a society. Spending and consumption are going to increase and decrease, as will prices. However, another factor besides these occasional built-in drops in spending is needed to evoke a recession. Usually, something changes quickly and provokes sharp increase or decrease in prices. A recent recession in early 2000 was caused by the sudden decrease in activity of the dot.com industry. In the 1990s, the telecom industry had made huge amounts of money and began to overreach its expectations in terms of assessing future demand. Suddenly, the previously looked for demand was much lower than expected, leading to mass layoffs, decrease in production, and thus decrease in spending. The dot.com fall is considered a “shock” in the GDP, which can fall sharply if the product or industry falls in production and spending. Though the recession resulting from the dot.com bust was considered over by 2003, it has far-reaching consequences that are still felt. Those who initially made excessive amounts of money may still find themselves jobless. Telecom companies significantly cut jobs, and employment rates in the industry have never fully been restored. Telecom companies also cut costs by outsourcing production to foreign countries. While this outsourcing has allowed some companies to continue operations, it left many with training for specific jobs they could no longer perform. However, other industries have since expanded and raised the GDP. So the recession is termed over even though many still feel its effects on a personal level. Terming a recession as “over” does not necessarily account for positive economic changes for the individual. For example, sometimes recession is evaluated in terms of the country’s jobless rate. When this is the case, and people find jobs, failure to evaluate changes in income can make the economy appear more productive than it actually is. A former telecom employee who now works at Wal-Mart may have a job, but this job is not equivalent to former work in compensation. So analysis of only one aspect of a recession should not be used to indicate economic recovery. What is GDP? The Gross Domestic Product or GDP is a measure of all of the services and goods produced in a country over a specific period, classically a year. The GDP considers the market value of goods and services to arrive at a number which is used to judge the growth rate of the economy and the overall economic health of the nation concerned. As an economic measure, the GDP can be a very useful yardstick, but it has some serious flaws which have led some people to propose the use of alternate measures of economic and social well being. When a GDP is calculated, it includes all private and government spending, goods and services produced, and exports. The GDP is adjusted for imports and inflation to arrive at a number which is believed to accurately reflect the sum total of the nation's goods and services. The GDP can be expressed as a bulk number, but it is more commonly converted into a GDP per capita, creating a number which reflects the average per citizen. High per capita GDPs are associated with overall improvements in standards of living. One advantage of the GDP is that because it is computed in a very clear and standardized way, it is easy to compare previous GDP numbers to judge the health of an economy. Economists can also convert GDPs from different countries to compare their economies to each other. The key desire with GDP is to show that a nation's economy has grown since the previous year, with nations usually issuing quarterly GDP estimates to give people an idea of how well their economies are doing. One of the biggest problems with the GDP is that it does not account for black and gray markets. While this may not seem like a major issue, some nations have very heavily trafficked black markets which could actually represent a sizable portion of the GDP. The GDP also does not account for the distribution of wealth, with GDP per capita numbers hiding economic disparities. A nation like the United States, for example, has a very large GDP per capita, but a huge disparity between the wealthiest and poorest Americans. GDP accounting also does not allow for the quality of the goods and services produced, or the purpose for which those goods and services were produced. A nation recovering from a severe hurricane, for example, might spend a lot of money to repair hurricane damage, thereby boosting its GDP, but the hurricane recovery would not necessarily be linked to economic growth. Environmentalists have also criticized the GDP for failing to weigh environmental factors, as in the instances of goods which produce pollution. In fact, the GDP can even reward environmental damage, because funds distributed for cleanup efforts are counted as part of the overall GDP.
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April 7, 200916 yr faggot and wrong. a recession is 3 consecutive quareters with 0 or less than 0% growth.
April 7, 200916 yr all the bad economy has gotten me is good deals and clothes and electronics and OT hours at work. so i hope it gets worse
April 8, 200916 yr all the bad economy has gotten me is good deals and clothes and electronics and OT hours at work. so i hope it gets worse If you guys are over 18, or whatever age you become an adult in your country then you should buy stocks, The Canadian Market is soo undervalued right now. You can easily more than double your money in the long term. 2-5 years. Also the canadian economy will come out of this before the united states, Beause of our banking system. Im not 18 yet but on that exact day i will probably spend 5000 in the market. ETF's, mutual fund, and stocks. Thinking of just going with the ETF's instead of a mutual fund.
April 8, 200916 yr If you guys are over 18, or whatever age you become an adult in your country then you should buy stocks, The Canadian Market is soo undervalued right now. You can easily more than double your money in the long term. 2-5 years. Also the canadian economy will come out of this before the united states, Beause of our banking system. Im not 18 yet but on that exact day i will probably spend 5000 in the market. ETF's, mutual fund, and stocks. Thinking of just going with the ETF's instead of a mutual fund. knobjockey;616919']on my 18th im buying a house. Both of you should invest in something more advantageous and time consuming, like college or a drug addiction. You can still live with your parents for a while longer when you are 18. Either that or consider an apartment and not a whole fucking house you big wig capitalist fat cat.
April 8, 200916 yr Author knobjockey;616919']on my 18th im buying a house. im living with my parents till im 35 :)
April 8, 200916 yr big wig capitalist fat cat. This may actually be one of the best insults uttered on these forums. Ever.
