The correct answer is D. All of the above.
A recession is a period of declining economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. The recession phase of the business cycle is typically associated with falling gross domestic product (GDP), rising unemployment, and declining asset prices.
Recessions are caused by a variety of factors, including financial crises, asset bubbles, and economic shocks. They can also be caused by government policies, such as austerity measures or tax cuts.
The effects of a recession can be severe, both on individuals and on the economy as a whole. Individuals may lose their jobs, their homes, and their savings. The economy may experience a decline in investment, production, and trade.
There are a number of things that can be done to mitigate the effects of a recession. Governments can provide fiscal stimulus, such as tax cuts or spending increases. They can also provide monetary stimulus, such as lowering interest rates.
Recessions are a normal part of the business cycle. However, they can be severe and have a long-term impact on the economy. It is important to understand the causes of recessions and the policies that can be used to mitigate their effects.
Here is a brief explanation of each option:
- A. Slowing down of economic activity over a limited period: A recession is a period of declining economic activity spread across the economy, lasting more than a few months.
- B. Period that results from accumulation of unsold goods, owing to fall in demand: A recession can be caused by a fall in demand, which leads to businesses producing less and workers being laid off. This can lead to a further fall in demand, as people have less money to spend.
- C. Period during which unemployment may rise and demand and output may fall, leading to slump in trade: A recession is typically associated with rising unemployment, as businesses cut back on production and workers are laid off. This can lead to a further fall in demand, as people have less money to spend.