How Many Quarters (3-Month Periods)must the "Real" GDP Decline to Have

question 67

Multiple Choice

How many quarters (3-month periods) must the "real" GDP decline to have the economy considered to be in a recession?

• A) 1
• B) 2
• C) 3
• D) 4

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Definitions:

Payback Period

The duration needed to recoup the cost of an investment.

Straight-Line Depreciation

Straight-line depreciation is an accounting method of allocating the cost of a tangible asset over its useful life in equal annual amounts.

Net Present Value

A method used in capital budgeting to assess the profitability of an investment or project by calculating the difference between the present value of cash inflows and outflows.

Discount Factor(s)

A numerical factor used to calculate the present value of future cash flows, reflecting how future values are worth less in today's terms.