Macroeconomics
Macroeconomics
5th Edition
ISBN: 9781319098759
Author: Paul Krugman, Robin Wells
Publisher: Worth Publishers
Question
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Chapter 12, Problem 3QFT
To determine

Concept Introduction:

Recession: Every economy faces different business cycle at different point of time. Recession is one of such business cycle. During recession there is huge unemployment and fall in production of goods and services. Recession Slows down the business activities.

The main reason for such phenomenon is the lack of demand and low investment level. When the recession is for longer duration it is known as depression.

To explain:

The relationship between inflation and interest rates on loans.

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