A recession is a period of time that lasts more than a few months where the economy gets significantly worse; a depression is defined as a severe recession where things plummet dramatically. A recession does not always lead to a depression, but a depression is always the result of a recession.Know More
There is no standard definition for either a recession or a depression, but there are some commonly accepted facts on both economic perils. A recession is defined as a period of at least a few months where the real GDP is slowly declining. There may be a period within those months that the GDP rose briefly, but plummeted again. A recession can also be seen in the way that companies do business, in employment rates and in industrial production.
When a recession turns into something more severe, it is considered a depression. A depression usually starts with a gradual recession and truly begins when the GDP and economy takes a fast drop in the way it is operating. The most famous of these depressions in history was the United States in the 1930s. The economy was booming, but gradually began to fail. It took a steep drop very quickly when the stock market crashed.Learn more about Economics
The economy, as a system of resource use and distribution, is important because resources are finite. Understanding the economy is crucial to political awareness and becoming an informed citizen.Full Answer >
Franklin D. Roosevelt responded to the Great Depression with a series of economic measures collectively known as "The New Deal," which were designed to help bring the country out of recession, rejuvenate the economy and give the American people confidence in banking again. The New Deal was helped along by the passage of a series of laws, beginning with the Emergency Banking Act and ending with the Farm Credit Act.Full Answer >
A closed economy refers to an economic system which does not have business relations with any economies outside its own system. Closed economies employ barriers to the trade of goods and services, monies and intellectual property to and from their economic system.Full Answer >
A planned or command economy is one in which major functions, such as production and distribution of goods, are controlled by the government. In a planned economy, the government owns some or all production facilities and decides what to produce and how goods are priced. This is in contrast to a market economy, where production and distribution are decided by market forces with little or no government intervention.Full Answer >