An economy that experiences two or more consecutive quarters of decreases in real GDP is experiencing a(n)
A) recession.
B) trough.
C) peak.
D) expansion.
E) deflation.

Question

Quizplus · Accepted Answer

A recession is defined as two or more consecutive quarters of decreases in real GDP. This means that the economy is experiencing a decline in overall economic activity, leading to lower production, employment, and income levels. The other options (B, C, D, E) don't fit the definition of a recession, as they refer to specific points in the business cycle (i.e. the lowest point, highest point, expansionary period, and decrease in prices, respectively) rather than a sustained period of economic decline.

An Economy That Experiences Two or More Consecutive Quarters of Decreases