Simply stated, a recession is defined as a significant, widespread, and prolonged downturn in economic activity.
Generally, a recession is indicated when there are two consecutive quarters of decline in a country’s Gross Domestic Product (GDP) starting from the peak of expansion that preceded it.
Typical effects of a recession include declines in economic output, employment, and consumer demand.
Though a recession may last only a few months, it is the economic recovery that may take as long as a few years to get back to the previous peak in the business cycle.
The recovery can vary (longer or shorter) in different segments of the economy as a recession often does not affect all businesses, geographic regions and markets in the same manner. In some instances, there are pockets of industry that are countercyclical and will not feel any effect of a recession, or may actually flourish during a recessionary period.
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