What term describes a downturn in economic activity often characterized by rising unemployment?

What term describes a downturn in economic activity often characterized by rising unemployment?

• A. Recession
• B. Recovery
• C. Prosperity
• D. Expansion

Answer: (A)

The term that describes a downturn in economic activity, particularly noted for a rise in unemployment, is a recession. A recession typically occurs when there is a significant decline in economic performance across various sectors, lasting for an extended period, often defined as two consecutive quarters of negative GDP growth. During a recession, businesses may struggle to maintain their profitability, leading to layoffs and hiring freezes, which in turn contribute to increased unemployment rates. The effects of a recession can ripple through the economy, affecting consumer spending, investment, and overall economic confidence. Recovery, on the other hand, refers to the phase following a recession where the economy begins to grow again, leading to increased employment opportunities and improved business conditions. Prosperity signifies a period of economic growth and high employment levels, while expansion marks a phase in the business cycle characterized by rising economic activity. These terms indicate positive economic conditions, contrasting with the downturn indicated by a recession.

The term that describes a downturn in economic activity, particularly noted for a rise in unemployment, is a recession. A recession typically occurs when there is a significant decline in economic performance across various sectors, lasting for an extended period, often defined as two consecutive quarters of negative GDP growth. During a recession, businesses may struggle to maintain their profitability, leading to layoffs and hiring freezes, which in turn contribute to increased unemployment rates. The effects of a recession can ripple through the economy, affecting consumer spending, investment, and overall economic confidence.

Recovery, on the other hand, refers to the phase following a recession where the economy begins to grow again, leading to increased employment opportunities and improved business conditions. Prosperity signifies a period of economic growth and high employment levels, while expansion marks a phase in the business cycle characterized by rising economic activity. These terms indicate positive economic conditions, contrasting with the downturn indicated by a recession.