RECESSION

What is recession???

                              Well this word has created a lot of  trouble to the people in industries, especially IT sector... Recession is nothing but economic breakdown. It is a sort of buisness contraction i.e., general slowdown of economic activity.

                            To explain more clearly lets us first see about the budgets of any country. There are two types of budget generally. One is Surplus budget and the other is Deficit budget.

SURPLUS BUDGET:  It means that the profit of a country is more than that of the expenses it has spent in a                      year.                             

DEFICIT BUDGET: It means that there is no profit for the country. A country takes more loan from   international banks. That is the expenses of the country is high.

                           It is more interesting to see that for a country to be economically improving, it has to prefer Deficit budget. Thats because, only if a country takes more loan, it can do many welfare schemes in that country. If it prefers surplus budget, then there will be lot of hot cash, but there will be  no improvement  in that country. It once happened in Afghanistan. that country preferred Surplus Budget. So there was huge amount of cash flow there.  So to buy a kilo of Potato, they took loads of money. Hence, the value of money will get diminished in this case.

                            With these little economics, lets see what is recession. First recession happened in 2007, which is also called as Great Recession. It continued for nearly 18 months. In US, nearly all banks agreed to give loans to everyone. They just kept their property for surety.  But people were not able to re-pay the amount. They just gave their property to banks as they were not able to re-pay the money. Hence there were no cash with the banks. As a result many banks had to shut down. This really affected the economy of every country. The only two countries which were least affected during this recession was India and Britain. Some how countries managed to come out of it. The main strategy that was adopted was increasing the interest rates. And most important of all is that in India, people prefer savings. Whatever they get, to some extent they save for their future. And this also accounts us to be in safer zone even at very hard times.

                            Now, after this all countries had recovered their economy. By the end of 2009 all the industries was in boom. But again Burj dubai, tallest buildings in the world has got huge loans from international banks. But they are feeling hard to re-pay it. Now they are almost ready to surrender the property. this is really a huge loss for banks.

                                But for that there is no major threats for other countries except USA. This is a rumor created by Chinese so as to  dump the US and raise as the biggest economis country in the world. But the fact is there is nothing to be worried of this. Its just a economic crisis in USA, which they ll overcome in some months. They have almost avoided it.