The Impact Of Recession On Businesses

Name

Course

Instructor 's Name

May 24 , 2010

Impact

Introduction

Recession normally refers to a negative growth in the Gross Domestic Product (GDP .This has to be in two consecutive quarters so as to qualify as a recession . This normally marks a reduction in the economic activity , which in turn is marked by a decline in production , and a slump in the consumer spending (Kirchen 2009 . This normally has a damaging effect on small businesses as well as the large businesses Even the stock market is negatively affected

by these changes . This discusses the impact of recession on businesses as well as the theory of stock market efficiency both the limitations as well as the accomplishments . Arguments will be based on General motors , Starbucks and Wal-Mart and how the current recession has affected them

Effect of recession on businesses

The effect of recession on Wal mart , Star bucks and General motors in the current recession was marked by a decline in the sales revenue . It was also marked by reduction in profits . This was also the effect on other large businesses and as a result the businesses either reduce the number of employees they hire or they freeze the hiring docket entirely (Cheng 2009 . They also due to the decline in the economic activities stop buying new equipment and cut down on the research activities normally carried out to reduce production (Krish 2009 . New product roll out is also stopped within the company . The expenditure that is used for...