In terms of the business cycle, what is a recession?
A.
an extended period of contraction
B.
a disrupted period of expansion
C.
a relatively low peak
D.
a relatively low trough
A. an extended period of contraction
A recession is a period of reduced economic activity characterized by a decline in GDP, employment, investment, and consumer spending. It is typically marked by negative economic growth for two consecutive quarters or more. During a recession, businesses may lay off workers, consumer spending may decrease, and overall economic output may fall.