Economic Decline

Definition

Economic decline refers to a gradual decrease in the economic activity of a country or region over time. This can be indicated by factors such as falling GDP, high unemployment rates, and decreased consumer spending.

Analogy

Think of an economy like a car engine. When it's running smoothly, all parts are working together and the car moves forward (economic growth). But if there's an issue with one part (like high unemployment), the engine starts to sputter and the car slows down (economic decline).

Related terms

Recession: A temporary period of economic decline during which trade and industrial activity are reduced.

Depression: A long-term downturn in economic activity that is more severe than a recession.

Stagflation: An economic condition characterized by slow economic growth and relatively high unemployment along with rising prices (inflation).