An economy with two consecutive quarters of negative growth is considered to be in what phase of an economic cycle?

An economy with two consecutive quarters of negative growth is considered to be in what phase of an economic cycle?
A . Recession
B . Slump
C . Depression
D . Inflationary

View Answer

Answer: A

Explanation:

Definition of Recession:

A recession is defined as two consecutive quarters of negative GDP growth, indicating a sustained economic downturn.

It reflects reduced consumer spending, higher unemployment, and lower production.

Elimination of Other Options:

B (Slump): A slump is a more general term and not a specific phase.

C (Depression): Refers to prolonged and severe economic downturns.

D (Inflationary): Opposite of the scenario described.

Reference: ICWIM Module 1: Explanation of economic cycles and recession indicators.