When Real GDP Falls for Two Consecutive Quarters the Economy

question 70

Multiple Choice

When real GDP falls for two consecutive quarters the economy is in a

• A) depression.
• B) recession.
• C) peak.
• D) trough.

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Definitions:

Inventory

The total amount of goods and materials held in stock by a business, warehouse, or store.

Gross Domestic Product

Gross Domestic Product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a certain period of time.

Leakage

Any diversion of income from the domestic spending stream; includes saving, taxes, and imports.