What happens to an economy during a recession cycle

Among the many effects of an economy in recession are interest rates falling, profits plunging, unemployment rates rising, and the stock market becoming unstable. People tend to lose money and become bankrupt.

A recession has a domino effect, where increased unemployment leads to less growth and a drop in consumer spending, affecting businesses, which lay off workers due to losses. A recession occurs when there are two or more consecutive quarters of negative gross domestic product (GDP) growth