Economic recession and economic booms Economic growth is an increase of the in the real level of output. In the 1990’s, the US had a major boom due to new internet technologies and increased computer usage. Economic growth is also a long-term expansion of the productive potential of the economy. Sustained economic growth should lead to an increase in real living standards and rising employment. Recession, to a certain extent, is often the aftereffect of a boom. While some recessions happen quickly, there is often a period of slowdown before a country reaches the lowest point of its recession. A recession is a period when a country’s economy is less successful and more people become unemployed. While a boom is the peak of a countries economic prosperity, a recession is when the real gross domestic products go down and not up. When it at the furthest down point, it is going to go and it goes back up, it is called the trough of recession. While the boom is when GDP is at its highest it is going to go before it will drop. This is called the peak of the boom. The disadvantages of periods of economic growth are that the economy can grow too quickly and therefore, there might be a danger of inflation. This is essential when certain markets take off and others remain the same, such as the real estate market. It’s often said that what goes up, must come down. However, while industry and investors almost always prosper from a boom, it is largely consumers and the working man that are affected when a market goes bust. This is largely because of the loss of jobs and the increased price in goods that occur when the value of the US dollar plummets. Economic growth can be caused by massive growth in consumer spending. This is because if the government lowers interest rates, people will often be able to buy more and spend less. People will go out and borrow money to buy houses and cars, which they would normally not be able to afford. This results in massive economic growth.