Which of the following is most closely related to recessions?
A) Positive long-run economic growth.
B) Rapid growth in the price level.
C) Falling rates of unemployment.
D) Negative real growth in output.

Question

Quizplus · Accepted Answer

Recessions are characterized by negative real growth in output, meaning that the economy is producing less than it did in the previous period. A recession can be officially declared when there are two consecutive quarters of negative growth. The other options (A, B, and C) are not closely related to recessions. Positive long-run economic growth, for example, would be associated with expansionary periods rather than recessions. Rapid growth in the price level is a characteristic of inflation, while falling rates of unemployment would suggest a growing workforce and expanding economy rather than a recession.

Which of the Following Is Most Closely Related to Recessions