The term recession describes a situation where:

A.  inflation rates exceed normal levels.
B.   government takes a less active role in economic matters.
C.  an economy’s ability to produce is destroyed.
D.  output and living standards decline.

ANSWER: D.  output and living standards decline.


question 1. The term “recession” describes a situation where:

Axplanation: Recession is defined by economists as two consecutive quarters of negative gross domestic product (GDP) growth in an economy. GDP is the measure of the final value of all goods and services produced in an economy for a given period. Therefore, when GDP growth is negative, output or productivity in an economy declines. At the same time, per capita GDP is a measure of living standards in an economy. When per capita GDP declines due to negative GDP growth, it indicates a relative decline in living standards in the economy

Definition for recession : Recession is a slowdown or a massive contraction in economic activities. A significant fall in spending generally leads to a recession.

Recession meaning:a period of temporary economic decline during with trade and industrial activity are reduced, generally identifiedby a fall in GDP in 2 successive quarters.