A recession is a period when
A)output growth is negative for two consecutive quarters
B)actual output falls below potential output and the rate of unemployment falls below the high- employment benchmark.
C)unemployment reaches 10 percent for an extended period of time.
D)actual output falls below potential output and the rate of unemployment rises above the high-employment benchmark..

Question

Quizplus · Accepted Answer

A recession is a period when actual output falls below potential output and the rate of unemployment rises above the high-employment benchmark. Option A only considers output growth and does not take into account the unemployment rate, while Option B considers actual output falling below potential output but has an incorrect statement about the unemployment rate falling below the high-employment benchmark. Option C only considers the unemployment rate and does not take into account actual output falling below potential output.

A Recession Is a Period When