Forlornistan is a country in the midst of a serious economic downturn. Forlornistan's GDP has declined steadily for over three years and is now at its lowest level in over sixty years. Forlornistan's unemployment rate is at an all-time high and the nation's CPI is falling. Forlornistan's economic condition is referred to as a

Question

Quizplus · Accepted Answer

A recession exists when GDP falls for two consecutive quarters (six months). A depression is a severe recession. Since GDP has fallen for more than three years, the unemployment is near an all-time high, and the average level of prices is falling, it is clear that the economy is experiencing a depression.

Forlornistan Is a Country in the Midst of a Serious