An economy is in recession when it experiences two consecutive quarters of negative economic growth.
A quarter is equal to three months of the year. So if an economy decreases in size for the first three months of the year, and then decreases again in the next three months, we can say the economy is now in recession.
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Key terms:
Negative economic growth – when the total output of a nation is decreasing over a given period of time.
Depression – a period of extreme economic downturn where a recession has been prolonged for 2 to 3 years or more.