premise: There are a number of ways in which economic recession can impact a business, beside the most obvious factor of reduced consumer spending and a resultant decrease in sales. Recession also leads to a rise in inflation, which increases a business's expenditure. These factors in turn act both to reduce competition, through less stable businesses closing down, and simultaneously also to increase it, as remaining ones compete more aggressively to stay afloat. The combined effect of these factors can lead both to fluctuating sales, and an unstable working environment tensions within the business may rise as employees are denied expected pay increases, or have to be let go to compensate for falling profits. Employers and employees alike must be flexible, and make every effort to adapt to new and less predictable economic conditions, to have the best chance of survival.
hypothesis: Reduced consumer spending leads to a rise in inflation.