Which of the following describes a recession?

A recession is characterized by a period of slow growth or a decline in economic output, which is well captured by the response selected. This phase typically involves a decrease in real Gross Domestic Product (GDP) across two consecutive quarters, which indicates a shrinking economy. During a recession, businesses often experience lower sales, leading to reduced production and potential layoffs, which further dampens consumer spending and investor confidence.

The concept of recession contrasts sharply with periods of significant growth, stability, or high consumer demand, where economic indicators reflect positive trends in output, job creation, and overall economic activity. Understanding these distinctions is crucial for analyzing economic cycles and their impacts on individuals and businesses.