TED-Ed: What causes an economic recession? | Richard Coffin

The video explores the concept of recessions, starting with the historical bronze recession in Britain. It explains how recessions are caused by disruptions in the balance between supply and demand, influenced by inflation and interest rates. Various factors like natural disasters, economic prosperity, and psychological factors can trigger recessions. Government policies, while intended to prevent recessions, can sometimes contribute to them. The video concludes by highlighting the complexity of modern markets and the importance of learning from past recessions.

What historical event is used to introduce the concept of a recession in the video?

• The Great Depression

• The Industrial Revolution

• The decline of bronze value in Britain

• The fall of the Roman Empire

Which of the following best describes a recession?

• A rise in stock market prices

• A decline in economic activity

• A temporary increase in employment

• A period of rapid economic growth

How do inflation and interest rates relate to the health of an economy?

• They have no impact on economic health

• They are indicators of economic stability

• They only affect the stock market

• They are unrelated to supply and demand

What can cause a recession during times of economic prosperity?

• Sustainable business growth

• Stable interest rates

• Excessive borrowing based on expected growth

• Decreased consumer spending

How can government policies designed to prevent recessions inadvertently contribute to them?

• By increasing taxes

• By stabilizing inflation

• By making debt too cheap and unsustainable

• By reducing public spending