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15 June, 13:10

What conditions stop the economy from growing and turn an expansion into a contraction?

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  1. 15 June, 13:43
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    Answer: External Shocks

    Explanation: External Shocks are unpredictable changes that occur outside the economy that lead to changes to the economy. External shocks can directly affect imports and exports within an economy or indirectly affect the fall of a company or organisation. External shocks can have negative and positive effects on the economy. Examples of positive external shocks can be tax cuts or interest rate cuts. Examples of negative external shocks can be volatile oil and gas prices. Negative external shocks prevent the economy from growing, leading to changes in the economy, for example from the expansion phase decreasing to the contraction phase within the economy.
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