Question

According to the concept of a __________________ recession, it may then take years, even a decade or more, for consumers, banks, and the government to pay down their excessive debts. During this _________________ recession a nation may have to endure very slow growth, no growth or even negative growth (deflation) before an economy can return to a healthy level of employment.

Answer 1

Balance sheet recession

Step-by-step explanation:

This description best fits the concept of a balance sheet recession. A balance sheet recession is a type of recession that happens when high levels of private debt force people and companies to focus on saving, as opposed to spending. This occurs because people become concerned with paying their debts. The lack of spending causes economic growth to slow down or decline.