An economic recession is defined by the National Bureau of Economic Research (NBER), a private nonprofit research organization, as a significant decline in activity spread across the economy that lasts more than a few months. Recessions are visible in terms of falling industrial production, declining real income, and shrinking wholesale-retail trade. Recessions are also marked by rising unemployment. Although many economic recessions consist of two or more quarters of declining real GDP, it is most accurate to describe recession as a period of diminishing economic activity rather than a period of diminished economic activity. A recession begins just after the economy reaches a peak of output and employment and ends as the economy reaches its trough. The period between a month of peak economic activity and the subsequent economic low point defines the length of a recession. During recessions, economic growth is falling or the economy is actually contracting. As shown in Figure 6.4, recessions in the United States are rare and tend to be brief.
The period following recession is called economic expansion. In many cases, economic activity is below normal during both recessions and through the early part of the subsequent economic recession
A decline in economic activity that lasts more than a few months economic expansion
A period of rising economic activity
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