What Variables Besides Real GDP Tend to Decline During Recessions

question 127

Essay

What variables besides real GDP tend to decline during recessions? Given the definition of real GDP, argue that declines in these variables are to be expected.

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Definitions:

Risk Impacts

The potential negative consequences or losses arising from uncertainties and vulnerabilities within a system or investment.

Portfolio

A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including mutual, exchange-traded, and closed funds.

Portfolio Owner

An individual or entity that holds a collection of investments, including stocks, bonds, real estate, or other financial assets, and is responsible for the management and decision-making of the portfolio.

High Average Returns

Refers to investments that consistently yield returns above the market or sector average over a period.