Bear market causes recession. What are the other factors?
2007-01-05 05:37:55 · 6 answers · asked by Anonymous in Business & Finance ➔ Investing
The definition of a recession is two consecutive quarters with negative growth in GDP. the US GDP is made up of approx 70% consumer spending. A drop in consumer spending, then, is the single biggest factor. The biggest components of consumer spending in housing and autos.
2007-01-05 06:01:32 · answer #1 · answered by Ivar 4 · 0⤊ 0⤋
bear markets do not cause ressions, it's the other way around.
ressions are caused by market growth that is unsustainable. If resources or factors of production are growing at only 3% but the econmy is growing at 6% the economy is outpacing sustainable growth, eventually all resources will be employed and suppy cannot keep up with growing demand so prices become inflated, (inflation occurs). inflation raises prices and decreases consumption which causes the resession.
2007-01-05 13:52:54 · answer #2 · answered by Economics Guy 3 · 0⤊ 0⤋
Slump in consumption which lead to companies not in a position to work at full capacity or planned capacity leading to lowering of GNP for two quarters.
2007-01-07 12:46:19 · answer #3 · answered by Mathew C 5 · 0⤊ 0⤋
Having a "Bush" in the White House.
2007-01-05 13:41:15 · answer #4 · answered by Wayne Z 7 · 0⤊ 0⤋
Too much supply and less demand
2007-01-05 13:49:30 · answer #5 · answered by Anonymous · 1⤊ 0⤋
to much of nothing
2007-01-05 13:45:33 · answer #6 · answered by nzcrusty 2 · 0⤊ 0⤋