Lesson 59 - unit 12 Flashcards
What are 2 reasons why recessions are a major topic of discussion?
Economists disagree on the definition and definite beginnings and endings. The media over exaggerates possible recessions.
What is the traditional definition of recession?
When the gross domestic product has declined for at least 2 consecutive quarters or 6 months.
Why do many economists not like the traditional definition of recession?
Because it does not consider other variables such as unemployment and consumer confidence and they ant more a precise starting point.
What group declares when a recession begins and ends?
The National Bureau of Economic Research Business Cycle Dating Committee.
How does this group define a recession?
A significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in the real GDP, employment, real income, industrial production, and wholesale-retail sales.
What has been the average length of a recession since WW2?
Just over 10 months.
What has been the trend since WW2 regarding the length of time between economic troughs?
It has gotten longer.
How has the recession that began in December 2007 determined?
Seven members of the Business Cycle Dating Committee met by conference call on 11-28-2008 and determined that the decline began 12 2007.
What is the NBER definition of a depression?
They don’t have one.
What are some commonly accepted guidelines for determining a depression?
It is a period of economic downturn more severe than a recession and it includes a decline in the GDP of more than 10%.
