CHAPTER ONE
INTRODUCTION
1.1. BACKGROUND OF THE STUDY
Economy according to Ibeabuchi (2017) is defined as the science that studies the ways to proceed to the administration and management of limited available resources in order to obtain good or services that meet the needs of individuals or organizations and it includes the processes of extraction and production of raw material, as well as marketing and distribution of products and services using limited resources. The main feature of economy is that it has limited resources. According to Merriam Webster Dictionary (2016) economy is the management of household or private affairs especially expenses. Business dictionary (2017) sees recession as the period of general economic decline as a contraction in the cross Domestic Product (GDP) for six month or longer. This is in line with the views of Kimberly (2017) who defined recession as when the economy declines significantly for at least six months. That means there is a drop in the following five economic indications, real Gross Domestic Product (GDP), income, employment, manufacturing and retail sales and recession occurs when the GDP growth rate is negative for two consecutive quarters or more. However recession can quietly begin before the quarterly Gross Domestic Product reports are out. Kimberly (2017) further stated that recession is destructive. It create wide spread unemployment, sometimes as high as 10 percent (100%), that is when it affects most people. As the unemployment rate rises, consumer purchasing power falls and business go bankrupt. In recessions, people lose their home when they can’t afford the mortgage payments. Young people cannot get a good job after which throws o their entire career. Even if the recession is short (nine to 18 months) its impact can be long-lasting. Recession is defined as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in a real gross domestic product (crop, real income, employment industrial production and wholes sale retail sales by National Bureau of economic research (NBER 2016). McKinney (2016) defined Economic recession as a period of general economic decline and is typically accompanied by a drop in the stock market, an increase in unemployment, and a decline in the housing market.