When real GDP falls for two consecutive quarters the economy is in a

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A recession is defined as two consecutive quarters of negative economic growth, as measured by a decline in real gross domestic product (GDP). Therefore, when real GDP falls for two consecutive quarters, it signals a recession. A depression is a more severe and prolonged downturn, characterized by an extended period of economic contraction, high unemployment, and significant declines in asset prices. A peak is the highest point of the business cycle, while a trough is the lowest point.

When Real GDP Falls for Two Consecutive Quarters the Economy