Is it better to concentrate on aggregate demand or
A recession is a phase of contraction of the business cycle when there is a general fall in economic activity. It mainly occurs when there is a huge decline in spending or due to an adverse demand shock. Generally, to respond to the recessions, the governments adopt expansionary macroeconomic policies such as raising the supply of money or raising government spending, or decreasing taxation.
Aggregate demand is the overall demand for final services and goods produce within an economy at a specific time period. It is directly associated with economic growth and is also used as a measure of calculating economic growth that is GDP. Aggregate supply is the overall supply within an economy that is planned by the firms for selling during a particular time period.
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