Standard Definition of Recession

Steps:

• Recall the economic definition: A recession is a significant decline in economic activity.
• Identify the key indicator: This is measured by changes in Gross Domestic Product (GDP).
• Check the duration: The decline must persist for at least two consecutive quarters.
• Compare options: Match against standard criteria to select the precise description.

Why B is correct:

• The National Bureau of Economic Research defines a recession as a notable decline in GDP lasting more than a few months, commonly operationalized as two consecutive quarters of negative GDP growth.

Why the others are wrong:

• A: Incorrectly specifies "economic growth in the GDP" instead of actual GDP decline; growth falling means slowdown, not necessarily recession.
• C: Current account deficit relates to trade imbalances, not overall economic contraction.
• D: Budget deficits reflect fiscal policy, not the broad economic activity decline defining recession.

Final answer: B