67.6k views
3 votes
A decline in the gross domestic product (GDP) must last for at least how many quarters to be considered a recession?

A. 1 quarter
B. 2 quarters
C. 3 quarters
D. 4 quarters

User Webjames
by
7.3k points

1 Answer

2 votes

Final answer:

A recession is defined as a decline in the gross domestic product (GDP) that lasts for at least two quarters, or six consecutive months.

Step-by-step explanation:

A decline in the gross domestic product (GDP) must last for at least two quarters, or six consecutive months, to be considered a recession. This definition is based on the pattern of U.S. real GDP since 1900, where short-term declines have regularly interrupted the long-term growth of GDP. Significant declines in GDP are classified as recessions, and if these are especially lengthy and deep, they are termed depressions. For instance, the 2008-2009 economic downturn was labeled the Great Recession, whereas the drop in GDP during the 1930s is known as the Great Depression. An average post-World War II recession lasts for about 11 months, reaffirming that the minimum duration of two quarters is a standard measure for identifying a recession.

User RedGlow
by
7.5k points