In early 2024, Germany's federal statistics office reported a contraction in real GDP, raising concerns that the Eurozone's largest economy was entering a prolonged recession. This followed a period of significant supply-side energy shocks and rapid interest rate increases by the European Central Bank (ECB) designed to combat inflation.
Explain possible reasons why an economy may enter a recession.
327 exam-style questions on AQA A Level Economics 2.3 Economic performance, covering 2.3.1 Economic growth and the economic cycle, 2.3.2 Employment and unemployment, 2.3.3 Inflation and deflation, and 2.3.4 Possible conflicts between macroeconomic policy objectives. Each one has a worked solution and a mark scheme showing where the marks go.