A recession occurs only if there are two consecutive quarters of declining real GDP.

Question

Quizplus · Accepted Answer

While two consecutive quarters of declining real GDP is often used as a shorthand for a recession, a recession is actually defined as a significant decline in economic activity spread across the economy, lasting more than a few months, characterized by widespread unemployment, a drop in income and spending, and other economic indicators. Therefore, it is possible for a recession to occur without two consecutive quarters of declining GDP or for a period of declining GDP to not be considered a recession.

A Recession Occurs Only If There Are Two Consecutive Quarters