A phase in the business cycle in which the economy's real GDP declines is known as:
A) a depression.
B) a recession.
C) a downtick.
D) disequilibrium.
E) limited demand.

Question

Quizplus · Accepted Answer

A recession is a phase in the business cycle in which the economy's real GDP declines. A depression is a severe and prolonged recession, whereas a downtick and limited demand are not commonly used terms to refer to this phase in the business cycle. Disequilibrium refers to a situation in which supply and demand do not match, which can occur during any phase of the business cycle.

A Phase in the Business Cycle in Which the Economy's