ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A recession is a significant, widespread, and prolonged downturn in economic activity. A common rule of thumb is that two consecutive quarters of negative gross domestic product (GDP) growth mean recession, but many use more complex measures to decide if the economy is in recession.

Detailed explanation-2: -The commonly used definition of a recession is that there is decline in real GDP for at least two consecutive quarters (i.e., 6 months).

Detailed explanation-3: -A significant decline in economic activity that is spread across the economy and that lasts more than a few months.

Detailed explanation-4: -In particular, a recession is usually associated with a decline of 2 percent in GDP. In the case of severe recessions, the typical output cost is close to 5 percent. The fall in consumption is often small, but both industrial production and investment register much larger declines than that in GDP.

Detailed explanation-5: -It defines a recession as “a recurring period of decline in total output, income, employment, and trade, usually lasting from six months to a year, and marked by widespread contractions in many sectors of the economy.” Using statistics, the NBER can calculate the precise start and end dates of recessions.