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Joanna

@joa71

Demand shock

Demand shocks occur when the demand for products drops as people stop earning money. A tactic to fix this is to stimulate the economy. In 2008, Australia gave households cash and encouraged them to spend to jumpstart the economy.

In 2020, the problem is also a lack of goods because businesses stopped working. If you give people more money, businesses will increase their prices, which will lead to a rise in inflation.

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Is there such a thing as a ‘good’ or ‘bad’ recession?

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