A recession is a period in which:
A)cost-push inflation is present.
B)nominal domestic output falls.
C)demand-pull inflation is present.
D)real domestic output falls.

Question

Quizplus · Accepted Answer

A recession is defined as a period of decline in economic activity, which is typically characterized by a decrease in real domestic output. Therefore, option D is the correct answer. Option A refers to a different phenomenon where inflation is caused by an increase in production costs, while option C refers to a situation where inflation is caused by excessive demand. Option B is incorrect as nominal output can increase during a recession due to inflation, but real output will still be declining.

A Recession Is a Period in Which