Economic Evironment For Business GROUP ASSIGNMENT:RECESSION BY LI XINTONG YIN HAILONG ABDUS SALAM FAISAL

What is recession

The manifestation of economic recession Unemployment rate rises The company loses money or goes bankrupt Deflation

history of recession in the world economy 1637 Tulip crisis 1720 The south sea bubble in the UK 1997 Asian financial crisis 2007 The us subprime crisis

MAIN FACTORS THAT CONTRIBUTE RECESSION High interest rates -When the interest rates are high overall it badly affects production growth in the country/slowdown of production resulting retrenchment of staff and unemployment. Increased inflation- Inflation causes general price rise and reduces purchasing power of general public that creates gloomy picture in the country. Reduces consumer confidence is another reason that can cause a recession. If consumers trust the economy is bad, they are less likely to spend money. Reduces real wages, in recession the wages are reduced hence low purchasing power of the employee. The employee might be making the same amount of money, but his purchasing strength has been reduced.

IMPACT OF RECESSION TO BUSINESS WORLDWIDE AND SPECIFICALLY IN MALAYSIA Great Recession Worldwide in 2007-2008 The Recession of 2008 was a major worldwide economic downturn that began in 2008 and continued into 2010 and beyond. It was the worst recession since the Great Depression of the 1930s. The global recession hit bottom in December 2009. However after five years there were few signs that the American economy started moving upward again. Five million of the 8 million jobs lost did not return. Greece, Portugal and Ireland still in serious trouble, while China and Brazil rebounded and are growing rapidly.

Britain was hit hard with its major banks in serious trouble Britain was hit hard with its major banks in serious trouble. Recovery in Britain remains slow; its GDP fell 5.2% from 2008 to 2009. The Impact of Recession in Malaysia 2008-2009 During the Global Financial Crisis in 2008-2009 development become slowly and unemployment increases in Malaysia as its palm oil, rubber, oil and natural gas sectors were hit by dropping product prices and its electronics industry and exports in general were hit hard by declining worldwide demand. During economic slowdown Malaysia into its first recession in a decade. Growth reached a record low of -6.2 percent in the first quarter of 2009 but rose back reaching an all-time high of 5.9 Percent in the third quarter of 2009. The economy contracted by 1.7 percent in 2009.

The measure for government can be taken 1.Changed financial policy from stable to positive. 2.Loosen monetary policy. 3.Increase government guidance and support. 4.Encourage medium-sized and small enterprises. 5.Increase and improve social welfare mechanisms.

Three majority economies part July 2018, the two-year and 10-year yield spreads of US debt fell to 25.5 basis points, a 11-year low, and the yield curve was about to fall upside down USA CHINA 6.6% percent of GDP growth in 2018 The EU's average social welfare spending is now close to 30% of GDP, Figures released by Eurostat show that unemployment exceeds 17.6 million within the EU EU

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