Chloe Lambert’s Easy Guide to the Downturn
Tuesday, February 3, 2009 16:28
While terms like recession and credit crunch might sound scary, they affect everyone. Get clued up with this easy guide to the downturn.
1. What Is a Ression?
When people make and sell thing like cars, food and clothes, it helps the whole country to make money. The more that people sell in the country and abroad, the more the economy grow. But if people buy less and sell less, the economy shrinks. A recession means that the value of the goods produced by the country goes down for six months in a row. Figures released on Friday show that UK is now in a recession. For the first time in years, UK as a whole is getting poorer.
2. Why Has It Happened?
Banks lend money to people and other banks. But over the past two years, people have not been repaying their debts, so banks have been cracking down on lending—how much credit they give out. That’s why this problem has been called the credit crunch. it means it is harder for people to borrow money to buy things like houses.
3. What Effect Will This Have on People?
They have less money, so are spending less. That means businesses have less money and have to make employees redundant. Some shops get into such a mess that they have to close as woolworths.
4. What Does It Mean For Me?
You might notice that your parents are being more careful with money, and cutting back on expensive things like holidays and eating out. You could help by thinking about your own money and spending, what do you really need, and what is less imiportant?
5. When Will It Get Better?
The recession is affecting countries all over the world, and governments are trying to get us out of it. They have been giving money to banks to get them to start lending again. Experts say the recession could last for two years.
Related posts:
- Bank May Begin Printing Money to Reverse Downturn
Bank of England drastically cut its forecast for UK’s economy... - Confident Consumers Ignore Downturn Threat
Consumer confidence has been in constant decline for the last... - Having a Guide into the Stabilizing Property Market
As UK businesses begin to emerge from the past year’s... - Add Value to Properties during Downturn
During the time of economic recession, most people are looking... - China’s Economy Downturn
Nowadays, the economic downturn in China has cost the jobs...
