What are the primary types of economic threats?

Primary economic threats include inflation, recession, supply chain disruptions, high national debt, energy crises, and geopolitical conflicts impacting trade and investment.

How does inflation become an economic threat?

Inflation erodes purchasing power, increases living costs, and can destabilize markets by making goods and services more expensive, impacting consumer spending and business investment.

What role do central banks play in mitigating economic threats?

Central banks use monetary policy tools like interest rate adjustments and quantitative easing/tightening to manage inflation, stimulate growth, and maintain financial stability during economic downturns.

Can geopolitical events directly impact global economic stability?

Yes, geopolitical events such as wars, trade disputes, or political instability can disrupt supply chains, increase commodity prices, deter investment, and create market volatility, significantly affecting global economies.

What is a recession and why is it considered an economic threat?

A recession is a significant decline in economic activity across the economy, typically identified by a fall in GDP, employment, and retail sales. It's a threat due to job losses, reduced income, and business failures.