1) Explain Recessions and reco

1) In economics the business cycle includes the four phases:expansion, peak, recession, and trough. The recession refers to acontraction phase in business cycle when there is a general declinein activities in an economy. The factors causing the recessionincludes a widespread decline in spending (i.e. the adverse supplyor demand shock) such as a rise in rate of interest or periods ofhigh deflation and chronically low rates of interest or rapid risein prices of items or a fall in the real wages or loss of theconsumer confidence, respectively. In modern economies therecessions are highly frequent. The governments often respond torecessions with an adoption of the expansionary macroeconomicpolicies, such as increasing government expenditure, a rise in themoney supply or a decline in the taxation. The recovery phaserefers to an expansion phase i.e. depression to prosperity (lowerturning point) which depicts a rise in economic activities. Itcauses a rise in output, decline in unemployment and laterinflation begins to rise

2) GDP can be determined with three measures discussed asbelow:

1. The expenditures approach: GDP will be computed as:

GDP = [Investment + consumption + government expenditure +exports – imports]

2. Income Approach: As per income approach GDP would be computedas the sums the factor incomes to the production factors.

3. Production Approach: This method computes GDP as thedifference between value of output minus the value of goods andservices used in output production during a specified period.

As per policy we have to answer first question I have answeredmore than one