| Consider the following characteristics. |
| 1. An extremely low aggregate demand in the economy, which causes productive activities to decelerate. |
| 2. The employment avenues start shrinking forcing unemployment rate to grow fast. |
| 3. To keep the business going, production houses go for forced labour cuts or retrenchment, |
| Above mentioned characteristics are which of the following economic condition? |
A) Economic boom
B) Economic recovery
C) Economic depression
D) Recession
Correct Answer: C
Solution :
[c] Economic recovery and boom are upturn from low demand and reaching the peak demand, So, the option [a] and [b] are eliminated based on the first Statement 1 itself. From, remaining two, we can eliminate option [d] from Statement 2 and 3. Because in recession, it is high unemployment. So, starting of the unemployment is the character of depression.
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