Question

A short term downward slope in economic activity results in decreases in output, income, and employment and may lead to a _____________.
a.recession

b. inflation

c. peak

d. none of the above

Answer 1

Answer:

A) Recession

Explanation:

Recession is a term in economics that refers to a situation where there is decline in economic growth. Specifically a recession is said to have occurred if for two or more consecutive quarters a negative economic growth is observed meaning that there is a decline in the gross domestic product (GDP). The implication of recession is that companies have less cash and revenue, so they will seek to reduce cost by cutting down on wages and employment which will generally lead to reduced output, income and jobs. Recessions are usually triggered by financial crises in an economy and government usually tackles it by spending more and reducing the cost of taxes

Answer 2

Answer:

(a) recession.

Explanation:

Recession is a season of retrogression in the economic activity.

Recession is normally defined by economist as two consecutive quarters of decline in the GDP (Gross Domestic Product), which is the monetary value of the goods and services produced in the country over a certain time.

This fall in economic activity though temporary results in decreases in output, income, employment, manufacturing and retail sales.

Recession is less severe than depression and occur more frequently.