Question

Suppose that Georgiania was a thriving empire in its golden age. Business was booming and it was the center of international trade under the leadership of Emperor Raphael III. His empire's pride and joy was the trading of green and black tea, and he decreed that their entire economy should be built around it. However, in the mid 1800s, Georgiania experienced a severe economic downturn when the other nations of the world created an embargo on tea from Georgiania, which led to civil strife due to thousands of workers being laid off.

A downward fluctuation in the economy like this is known as a ........(1)
The correct term is a key component ......(2)

Answer 1

1. recession

2. of macroeconomics

Step-by-step explanation:

1. A recession is a period of general economic decline usually characterized by a fall in the economy's GDP, decreased sales and revenues, high levels of employment etc. The downward fluctuation in this scenario represents a recession.

2. Macroeconomics is a branch of economics that studies the economy's performance and structure as a whole. Macroeconomics focuses on issues that affect the economy as a whole such as levels of employment, GDP, inflation rates etc.