What term describes a prolonged decline in the economy lasting more than six months?

What term describes a prolonged decline in the economy lasting more than six months?

• A. Contraction
• B. Recession
• C. Expansion
• D. Economic Depression

Answer: (B)

The term that describes a prolonged decline in the economy lasting more than six months is a recession. A recession is typically recognized by a decrease in gross domestic product (GDP), income, employment, manufacturing, and retail sales over several quarters. This widespread slowdown in economic activity reflects a decrease in consumer and business confidence, leading to reduced spending and investment. While a contraction refers to a decline in economic activity, it does not specify the duration and can be a shorter-term phenomenon. An economic depression, on the other hand, is a more severe and prolonged downturn that goes beyond the typical definition of a recession. Expansion denotes a period of economic growth and recovery, contrasting with the decline characterized by a recession. Thus, the identification of a recession as a specific downturn lasting over six months aligns accurately with economic definitions, establishing it as the correct answer.

The term that describes a prolonged decline in the economy lasting more than six months is a recession. A recession is typically recognized by a decrease in gross domestic product (GDP), income, employment, manufacturing, and retail sales over several quarters. This widespread slowdown in economic activity reflects a decrease in consumer and business confidence, leading to reduced spending and investment.

While a contraction refers to a decline in economic activity, it does not specify the duration and can be a shorter-term phenomenon. An economic depression, on the other hand, is a more severe and prolonged downturn that goes beyond the typical definition of a recession. Expansion denotes a period of economic growth and recovery, contrasting with the decline characterized by a recession. Thus, the identification of a recession as a specific downturn lasting over six months aligns accurately with economic definitions, establishing it as the correct answer.