CA Foundation P4 · Chapter 6 · Question 12 of 15
A commonly used rule of thumb defines a recession as:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Two consecutive quarters of decline in real GDP
Explanation
A widely used practical definition of a recession is a fall in real GDP for two successive quarters. Inflation or stock market movements alone do not define a recession.
More Business Cycles MCQs
- Q14Samuelson and Hicks explained business cycles through the interaction of:
- Q15Which of the following statements about the impact of business cycles is INCORRECT?
- Q1The correct sequence of the phases of a business cycle is:
- Q2Which statement about business cycles is correct?
- Q3Which of the following is generally regarded as a leading indicator of economic activity?