In the context of Indian economy consider the following pairs Term Most appropriate description Melt...........

Economic Affairs Financial Markets

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In the context of Indian economy, consider the following pairs :

Term Most appropriate description

Melt down - Fall in stock prices
Recession - Fall in growth rate
Slow down - Fall in GDP

Which of the pairs given above is/are correctly matched?

1 only

2 and 3 only

1 and 3 only

1, 2 and 3

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Explanation:

1 only

Economic meltdown results in financial assets losing in value in a tail spin, often resulting in liquidity crisis. There are no transactions or few transactions in some of the financial assets. This often results in aftermath recession and depression, as traditional tools are not in a position to help the situation. Its a fire like situation in a train or a building and occupants ( participants in financial assets) jump out just to escape the fury.

Economic slowdown on the other hand is more can be gradual like deflationary situation, lack of demand, etc.

Recession is a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.