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In a recession, does economic activity increase or slow down?

User Dzada
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Final answer:

In a recession, economic activity slows down due to factors such as reduced consumer spending and decreased demand for goods and services.

Step-by-step explanation:

In a recession, economic activity slows down. A recession is a period of declining economic growth characterized by a decrease in Gross Domestic Product (GDP) over two consecutive quarters. During a recession, businesses may experience reduced sales and profits, leading to layoffs and reduced production. Consumers may also spend less, leading to a decrease in overall economic activity.

For example, during a recession, people may choose to save more and spend less on non-essential items, such as vacations or luxury goods. This decrease in consumer spending can have a ripple effect on businesses, leading to reduced demand for their products or services and ultimately slowing down economic activity.

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