A recession is a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

A. An increase in demand for stocks - This is typically indicative of economic growth, not a recession. During a recession, investors often move away from stocks due to the increased risk of companies performing poorly.

B. An upward sloping yield curve - This is typically indicative of expected economic growth, not a recession. An upward sloping yield curve suggests that long-term interest rates are expected to be higher than short-term rates, which is usually associated with economic expansion.

C. A negative term spread - This is often indicative of a recession. A negative term spread, also known as an inverted yield curve, occurs when long-term interest rates are lower than short-term rates. This is often seen as a sign of an upcoming recession.

D. An increase in the number of mortgages issued by banks - This could be indicative of either economic growth or a housing bubble, not necessarily a recession.

Therefore, the answer is C. A negative term spread.

Question

A recession is a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

A. An increase in demand for stocks - This is typically indicative of economic growth, not a recession. During a recession, investors often move away from stocks due to the increased risk of companies performing poorly.

B. An upward sloping yield curve - This is typically indicative of expected economic growth, not a recession. An upward sloping yield curve suggests that long-term interest rates are expected to be higher than short-term rates, which is usually associated with economic expansion.

C. A negative term spread - This is often indicative of a recession. A negative term spread, also known as an inverted yield curve, occurs when long-term interest rates are lower than short-term rates. This is often seen as a sign of an upcoming recession.

D. An increase in the number of mortgages issued by banks - This could be indicative of either economic growth or a housing bubble, not necessarily a recession.

Therefore, the answer is C. A negative term spread.

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A recession is a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

A. An increase in demand for stocks - This is typically indicative of economic growth, not a recession. During a recession, investors often move away from stocks due to the increased risk of companies performing poorly.

B. An upward sloping yield curve - This is typically indicative of expected economic growth, not a recession. An upward sloping yield curve suggests that long-term interest rates are expected to be higher than short-term rates, which is usually associated with economic expansion.

C. A negative term spread - This is often indicative of a recession. A negative term spread, also known as an inverted yield curve, occurs when long-term interest rates are lower than short-term rates. This is often seen as a sign of an upcoming recession.

D. An increase in the number of mortgages issued by banks - This could be indicative of either economic growth or a housing bubble, not necessarily a recession.

Therefore, the answer is C. A negative term spread.

Which of the following is most indicative of a recession?An increase in demand for stocks. An upward sloping yield curve. A negative term spread. An increase in the number of mortgages issues by banks.

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