ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A healthy economy expands over time, so two quarters in a row of contracting output suggests there are serious underlying problems, according to Shiskin. This definition of a recession became a common standard over the years.

Detailed explanation-2: -Recent Recessions The investment advisor argues that the economy met the technical definition of recession after two consecutive quarters of negative growth, but numerous other positive economic indicators show the economy is not in recession.

Detailed explanation-3: -A recession is frequently defined by economists and the media as occurring when the economy experiences two consecutive quarters of negative GDP growth. It falls to the National Bureau of Economic Research (NBER), however, to officially call a recession, and the NBER does not actually follow such a simple rule.

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.