A depression occurs when:

Question

Quizplus · Accepted Answer

A depression occurs when there is a deep and prolonged economic downturn, marked by a severe decline in economic activity, output, and employment. It is usually characterized by high levels of unemployment, low consumer spending, and a lack of investment. Option A is incorrect because an increase in both output and employment is a sign of economic expansion. Option C is also incorrect as an increase in price level is attributed to inflation, not depression. Option D is partly incorrect because a lack of employment growth is a symptom of an economic slowdown, but alone, it doesn't adequately define depression.

A Depression Occurs When