ECONOMICS
ECONOMIC GROWTH
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Two months of negative economic growth
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Two quarters of negative economic growth
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A fall in GDP
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A fall in national income
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Detailed explanation-1: -The most common definition of recession used in the media is a ‘technical recession’ in which there have been two consecutive quarters of negative growth in real GDP. This definition often appears in textbooks and is widely used by journalists.
Detailed explanation-2: -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-3: -The popular definition of a recession is usually considered to be at least two consecutive quarters of economic contraction – or ‘negative growth’ – in Gross Domestic Product (GDP).
Detailed explanation-4: -Most commentators and analysts use, as a practical definition of recession, two consecutive quarters of decline in a country’s real (inflation adjusted) gross domestic product (GDP)-the value of all goods and services a coun-try produces (see “Back to Basics, ” F&D, December 2008).
Detailed explanation-5: -What is a recession? While some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle.