Understanding Recessions and Depressions

What is the technical definition of a recession?

• A month of stock market decline

• A year of economic stagnation

• Two consecutive quarters of GDP decline

• A single quarter of GDP growth

Which organization defines the start and end dates of recessions in the U.S.?

• National Bureau of Economic Research

• Federal Reserve

• International Monetary Fund

• World Bank

What was a major cause of the 2008 financial collapse?

• Excessive and bad debt in the mortgage industry

• A sudden increase in oil prices

• A global pandemic

• A technological breakthrough

What is an asset bubble?

• Investors overvaluing an industry

• A sudden increase in employment

• A government policy change

• A period of deflation

How can deflation negatively impact an economy?

• By stabilizing prices

• By causing people to hoard money

• By encouraging spending

• By increasing the value of currency

What distinguishes a depression from a recession?

• Lower unemployment rates

• Shorter duration and less severe impact

• Higher GDP growth

• Longer duration and more severe impact

Which historical event is considered the only depression in the last century in the U.S.?

• The Great Recession

• The 1970s Oil Crisis

• The Great Depression

• The Dot-com Bubble

What was the unemployment rate during the Great Depression?

• 25%

• 5%

• 14.7%

• 10%

Why are recessions and depressions difficult to predict?

• They are caused by predictable market trends

• They are triggered by large unexpected events

• They follow a regular cycle

• They are controlled by government policies

What might be needed to predict the next recession?

• A detailed economic model

• A government report

• A stock market analysis

• A crystal ball