Final answer:
A recession occurs when business activities decelerate, workers are laid off, and GDP declines; this is described in Option B. It's a phase of the business cycle between the peak and the trough, with a recent example being the COVID-19 pandemic-induced recession in 2020.
Step-by-step explanation:
The period of time when business activities slow down, workers are laid off, and GDP declines is known as a recession, which is Option B. A recession is part of the business cycle and occurs after an economy reaches its peak of activity and ends once the economy hits its trough. The National Bureau of Economic Research (NBER) defines a recession as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. According to historical patterns, such as those listed in Table 19.7, recessions have been a recurring phenomenon in the U.S. economy since 1900, with the length and severity of these recessions varying.
The most recent major recession was triggered by the COVID-19 pandemic, starting in February 2020 and concluding formally in May 2020, marking it as one of the most severe yet shortest recessions since the Great Depression. Prior to that, the Great Recession spanned approximately 18 months, beginning in December 2007 and ending in June 2009. Expansion phases, such as the one that began after the June 2009 trough, signify periods of growth until the economy reaches another peak.