alleryStart learning →How is a recession defined?
AA year in which output grows more slowly than in the year before
BA period in which prices fall while output continues to rise
CA month in which the unemployment rate rises above ten percent
DA decline in gross domestic product lasting two consecutive quarters
Answer & Solution
Correct answer: D. A decline in gross domestic product lasting two consecutive quarters
1. A recession is a decline in gross domestic product.
2. That decline must last for two consecutive quarters, each quarter being a three-month period.
3. A recession is followed by a recovery period, when economic activity increases once again.
4. Slower growth is still growth, and no definition of recession is written in terms of prices or of an unemployment threshold.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 1 "Understanding Economic Systems and Business", section 1.4 Macroeconomics: The Big Picture_
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