As we discuss macroeconomic issues and identify problems related to the economic meltdown?
GDP(Gross Domestic Product)
During economic down, the GDP growth of a country because lesser. Firstly, it effect the consumption which is purchase consumer goods and services. People will not spend money to buy things during economy down. They more save money for worst case scenario. Secondly, the organization will will not investment to do inventory, building or on capitals goods. Thirdly, government will reduce their spending to buy good and services in both domestic and foreign market. Finally, the imbalance in the Net Export where the import is more than export. It happen because manufacturing companies will shutdown their operation during economic down to reduce cost, so the country cannot export good outside the country as per plan. So, the reduce in purchase of consumption, foreign investment, payment to government and export will affected the GDP of a country.
Inflation
The inflation is where the average price is rising and fall in the value of the money. This may happen too much money chasing for few goods. So, the price of the item increased due to it’s demand. At the same time, the cost of living also increased.
The Cyclical unemployment
The workers is laid off because of economy down. This happen because the company plan for cost reduction and recover during bad economy.
