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Sokora 1
Zack Sokora
Professor Coe
15 June 2017
Microeconomics
Recessions: The Before, During and After
According to Dictionary.com a recession is defined as “a period of temporary
economic decline which trade and industrial activity are reduced”, but there is a lot more
that goes into a recession than just the decrease of trade and labor. Long story short, a
recession begins when inflation occurs. Inflation is a rise in prices for goods in services
for an extended period of time and this can be the cause of a recession because if the
price of goods and services rise, but the value of a dollar stays the same, then the good or
service will be considered a luxury good and will cause the demand and supply curve to
shift to the left. This shift in demand and supply would cause prices to fall, and the
supply to decrease. These lower costs cause corporations to stop hiring and sometimes
