What does it mean?
In: Economics
Imagine the entire UK (your parents, every company operating here and paying taxes here etc.) produce the total amount of 100 pounds a year. GDP falling by 20.4% means that they will produce only 79 pounds and 60 pence this year. Now keep in mind that the amount of money the UK gets to spend comes partly from that amount through income taxes etc. It boils down to everyone having less money than they did before, and as we all know – it’s not good. Companies will have less money so they can’t work on the same scale and will probably have to fire some of it’s employees to cut down on expenses. That results in people not having money (they can’t work to earn it) and the government having to pay them unemployment benefits when the gov. itself doesn’t do great financially. Keep in mind that I very oversimplified everything.
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