The following data show Uruguay's GDP using purchasing power parity in billions of dollars. Year 2000 2001 2002 2003 2004 2005 2006 2007 2008
GDP($) 26.1 25.8 23.3 24.3 27.9 30.1 33.9 37.2 40.2
Using the data, we can conclude that
A) the standard of living did not change in Uruguay between 2000 and 2008.
B) Uruguay entered a recession in 2001.
C) potential GDP decreased in 2001.
D) Uruguay's economy reached a peak in 2005.

Question

Quizplus · Accepted Answer

A recession is typically defined as a decline in GDP for two consecutive quarters. The data shows a decrease from 26.1 billion dollars in 2000 to 25.8 billion dollars in 2001, and then a further decrease to 23.3 billion dollars in 2002, indicating a period of economic decline that could be characterized as a recession.

The Following Data Show Uruguay's GDP Using Purchasing Power Parity