ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -If a country’s real gross domestic product declines for two or more quarters, it is indicative of a recession in the business cycle. Negative growth rates are often accompanied by declining real income, increasing unemployment, and reduced production.

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: -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-4: -Negative growth is a decline in a company’s sales or earnings, or a decrease in an economy’s GDP during any quarter. Declining wage growth and a contraction of the money supply are characteristics of negative growth, and economists view negative growth as a sign of a possible recession or depression.

Detailed explanation-5: -GDP declines, and unemployment rates rise because companies lay off workers to reduce costs. At the microeconomic level, firms experience declining margins during a recession.