Question

A recession has traditionally been defined as a period during which Group of answer choices a. nominal GDP declines for four consecutive quarters. b. nominal GDP declines for two consecutive quarters. c. real GDP declines for four consecutive quarters. d. real GDP declines for two consecutive quarters.

Answer 1

Answer:

The correct answer is letter "D": real GDP declines for two consecutive quarters.

Explanation:

A recession is an overall decline in a country's economy followed by two consecutive quarters of losses. The most important index to measure the decline in an economy is the real Gross Domestic Product (GDP). However, the National Bureau of Economic Research (NBER) states that the real GDP should not be considered the only gauge to determine a country's recession.