Growing US debt, higher oil prices, rising unemployment, and other challenges in the 1990s caused an economic recession.
What is an economic recession?
- A recession is a significant decline in economic activity that lasts for months or even years.
- Recessions takeaway normal economic activity levels. As a result, the country’s GDP and individual income decline.
- There is more than one way for a recession to get started, from a sudden economic shock to fallout from uncontrolled inflation.
- This creates a mess in the entire economy. To tackle the menace, economies generally react by loosening their monetary policies by infusing more money into the system, i.e., by increasing the money supply.
- The most common example of a recession is the global recession of the 2008 financial crisis.
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