Question

What is the name of the period when an economy begins to shrink?

Answer 1

The correct answer is A.

Recession is a significant decline in economic activity that goes on for more than a few months. It combines negative economic growth, a decrease in industrial production, employment, real income and wholesale-retail trade.

Recession is a normal part of a business cycle. There is no way of predicting when and for how long a recession will occur. Some possible predictors of recession are: declining asset prices, the change in unemployment figures and an inverted yield curve.

A depression is a deep and long-lasting recession.