ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Real GDP has declined.
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GDP has declined.
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Nominal GDP has declined for at least two consecutive quarters.
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Real GDP has declined for at least two consecutive quarters.
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Detailed explanation-1: -In 1974, economist Julius Shiskin came up with a few rules of thumb to define a recession: The most popular was two consecutive quarters of declining GDP. A healthy economy expands over time, so two quarters in a row of contracting output suggests there are serious underlying problems, according to Shiskin.
Detailed explanation-2: -When GDP declines during a recession, growth in real consumption and investment spending both decline; unemployment rises sharply.
Detailed explanation-3: -Routine recessions can cause the GDP to decline 2%, while severe ones might set an economy back 5%, according to the IMF. A depression is a particularly deep and long-lasting recession, though there is no commonly accepted formula to define one.
Detailed explanation-4: -Indicated by weak output and rising unemployment rates A recession can be defined as a sustained period of weak or negative growth in real GDP (output) that is accompanied by a significant rise in the unemployment rate. Many other indicators of economic activity are also weak during a recession.
Detailed explanation-5: -A recession is two or more consecutive quarters of a negative growth rate of gross domestic product (GDP).