A decision matrix (also called selection matrix, problem matrix, etc.) evaluates and prioritizes a list of options. A team first establishes a list of weighted criteria and then evaluates each option against those criteria. It is also a tool that helps convert qualitative data into quantitative data using evaluation criteria. Often decisions must be based on qualitative data that are difficult to analyze. These data are also normally shaded by personal impressions and feelings, so the discussion about best options is sometimes influenced by personal bias rather than strategic choices. With a decision matrix, everyone can participate in a process that leads to a group decision with quantitatively compared data.
To develop a decision matrix:
1. All the options must be identified.
2. Criteria to be used must be decided.
3. A scale or a weight for all the criteria must be selected.
4. Every option in accordance with the criteria and scale must be evaluated and the best option chosen.
A depression is a severe recession lasting a long time. Although there is no widely accepted definition, a depression is understood to be any economic downturn over a long period when real GDP declines by more than 10%. When discussing the nature of a recession and depression, the cause of a downturn can be viewed from different perspectives. A standard recession usually follows a period of tight monetary policy, while a depression is the result of a bursting asset and credit bubble, a contraction in credit, and a decline in general price levels.
Another important factor in the definitions of a recession and a depression is the difference in policy responses. A recession triggered by tight monetary policy can be “cured” by lower interest rates, but fiscal policy tends to be less effective because of the time lags involved. By contrast, in a depression caused by falling asset prices, a credit crunch, and deflation, conventional monetary policy is much less potent than fiscal policy.
See also: Recession