What is a recession and how does it impact businesses?

A recession is a period of economic decline characterized by a decrease in GDP, rising unemployment, and reduced consumer spending. During a recession, businesses typically face reduced demand for their goods and services, leading to lower revenues. Companies may respond by cutting costs, laying off employees, or delaying investments. Small businesses, in particular, can struggle to survive as access to credit may become more limited. However, businesses that offer essential goods or services may be less affected. In the long term, a recession can lead to business closures, bankruptcies, and slower economic recovery.