The Rise Of The United Kingdom

1811 Words8 Pages
January 23, 2009 was the official day that the United Kingdoms entered into what would be one of the longest and deepest recession ever in their history. It was the deepest due to a lot of loss of output that couldn’t be recuperated. The United Kingdom had not been in a recession since 1991. A recession for an economy means high unemployment rates, slowing GDP, and high inflation. According to BBC News, Gross Domestic Product (GDP) fell by 1.5% in the last three months of 2008 after a 0.6% drop in the previous quarter meaning that the widely accepted definition of a recession - two consecutive quarters of negative economic growth - had been met. It was the biggest on quarter to quarter decline since the 1980. Not only that their currency, the pound, also drop significantly counter the U.S dollar, one pound equaling $1.35.
From what I learned in class and from our textbook “Principles of Macroeconomics, 7th Edition” by N. Gregory Mankiw is that when we want to know if an economy is doing well or not, we must look at the total income that everyone in the economy is earning and spending, that is what the GDP does. Gross domestic product (GDP) is the market value of all final goods and services produced within a country in a given period of time. GDP uses the market value by using market prices because market prices measure the amount people are willing to pay for different goods, so they reflect the value of those goods and it includes all items produced in the economy and
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