Which of the following best defines the difference between a recession and a depression?
A) The terms are synonymous; there is no difference at all.
B) A depression is the correct term for recession experienced on a worldwide scale.
C) A depression is a period of economic hardship, while a recession generally is not.
D) A depression is a long, very severe recession.
E) A depression means potential GDP is falling. In a recession, only the actual GDP is falling.

Question

Quizplus · Accepted Answer

A depression is a longer and more severe period of economic decline compared to a recession. While a recession lasts for a few months to a couple of years, a depression can take several years to recover from and is characterized by high unemployment rates, widespread business closures, and a drastic drop in GDP.

Which of the Following Best Defines the Difference Between a Recession