Causes Of Economic Stagnation
The Economic stagnation is a period of time when the economic growth GDP is slow. This usually occurs with high number of unemployment. When “Slow” was said in the start of the paragraph it means it’s likely to be slower than a potential growth that was estimated by macroeconomists. Economic growth of less than 3 to 4% yearly is considered stagnation. The growth rate may be higher than in other countries that are not experiencing economic stagnation. Stagnation does not only occur in countries it also occurs in specific industries or companies.
When the total output of an economy is declining or leveled, it’s known as is an economic stagnation. Unemployment is also one of the drivers behind a stagnant economy. Stagnation results; in no
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When the economy in the United states started to slow down caused by American homeowners whom failed to pay their mortgages, banks all over the world with links with those mortgages started losing money. One of the largest banks in America, Lehman brothers, collapsed because of its bad investments grow. That made other banks and investors scared because they had links with this Lehman brothers bank. The fear of more banks could failing caused investors and banks to take extreme precautions. Banks stopped lending to each other, and they pushed people to pay their debts. European banks that had invested in the American mortgage market were hit hard (No name, …show more content…
Exports are important because it adds to the producing nations gross output. Exports could also be used in trade and if they are countries exchange products or services with each other. Companies and countries export services and product for multiple reasons such as; it has the ability to increase sales by expanding into new markets that are all around the world. Exporting spreads the risk by diversifying into multiple different markets and foreign markets can reduce the priceses by expanding operation to meet the demand. “Export growth is important because of its effect on internal trade and economic stability. Even more, the rate of economic growth and the distribution of income and wealth in a country are closely related to export growth. (Deekay,
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