Solved: In a recession share prices tend to be low and companies, Microeconomics

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In a recession share prices tend to be low and companies

1. In a recession, share prices tend to be low and companies can be bought at low prices and workers hired for low wages. Given that recessions are only temporary, what stops you from buying loads of stocks in a recession and then selling them during an expansion?

2. If rising in?ation after an oil price increase leads the Central Bank to dramatically in- crease interest rates, what is the impulse behind this business cycle and what is the propaga- tion mechanism?

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Microeconomics: In a recession share prices tend to be low and companies

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