What is the name of the period when an economy begins to shrink?

What is the name of the period when an economy begins to shrink?

A. recession

B. depression

C. recovery

D. prosperity

Answer: A. recession

A recession is therefore a time of shrinking in economic activity referred to as a cycle of numbered recessions. This usually leads to reduced gross domestic product, increasing unemployment rate, falling expenditure and less investment by business organizations. Recessions are normally based on a situation where an economy has had negative GDP growth for at least two consecutive quarters. In this period, the various organizations might scale down production, fire employees, and adopt every method possible that could help them endure the downturn. Due to volatility in the economy, consumer tend to cut down on their expenditure and save more. The government and central bank would ordinarily use different measures to try and ease the economy and shorten the period of the business cycle that is referred to as the recession. Recessions are rather difficult yet they are not viewed as abnormalities of the economic cycle; they are shorter and less deep compared to depressions.