Consider the following two alternative definitions of a recession:(1) A period of negative output growth and (2) A period when the output level is below the country’s potential level.Now consider a country that has been producing a lot of oil, and whose oil wells have suddenly run out. This results in both its potential and actual output falling.Which of the following statements are correct?Select the two correct answersGroup of answer choicesAccording to the second definition, the country may not be in a recession.The policymaker using the first definition may underreact to the slowing outputAccording to the first definition, the country is now unambiguously in a recession.According to the second definition, the country’s actual output is unambiguously below its potential output

An economy producing below potential output is considered to be operating in a(n) Blank______ gap.Multiple choice question.recessionaryinflationaryexpansionaryconcessionary

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.

ow do economists determine whether an economy has entered a recession in its business cycle?A.It has a negative value in its steady growth line for less than one quarter.B.It alternates rapidly between periods of extreme growth and decline.C.It experiences contractions and expansions without peaks or troughs.D.It experiences a contraction that lasts for at least two economic quarters in a row.

A recession is defined as a period in whichMultiple Choicedemand-pull inflation is present.real GDP falls.nominal domestic output falls.cost-push inflation is present.

Government budget deficits tend toGroup of answer choicesincrease in recessionsincrease when there is an expansionary output gap.None of the others is correct.decrease in recessionsremain in balance irrespective of business cycles