How does one realize an economic depression has taken place?

Question

Quizplus · Accepted Answer

Prolonged high unemployment is a clear sign of an economic depression where the economy experiences a significant decrease in economic activity and production leading to a loss of jobs for many. This is often accompanied by a decrease in consumer spending and business investment, which can worsen the economic situation.

A is incorrect because significant oil price hikes could be an indication of global market trends, supply and demand factors, or geopolitical events, and not necessarily a sign of an economic depression.

B is incorrect because an increase in GDP would indicate economic growth, and not a depression.

D is incorrect because government intrusion in the economy can take many forms and does not necessarily indicate an economic depression, although it could be a contributing factor.

How Does One Realize an Economic Depression Has Taken Place