How is a recession typically defined in economic terms?

A recession is typically defined as a significant decline in economic activity lasting more than a few months. This definition is widely accepted among economists and is characterized by various indicators such as a decrease in GDP (Gross Domestic Product), falling income levels, rising unemployment rates, and a decline in consumer spending and business investment. The two consecutive quarters of negative GDP growth is often used as a rule of thumb for identifying a recession, demonstrating the broad and sustained nature of the downturn in economic performance.

The other options refer to more specific or less comprehensive issues. A temporary decline in specific industries does not encompass the widespread impact across the economy that characterizes a recession. Similarly, a moderate decrease in employment rates, while potentially part of a recession, does not capture the overall economic decline that is essential to the definition. An increase in market volatility can occur due to many factors, including speculation or investor sentiment, and does not necessarily indicate an economic recession. Thus, the definition highlights the extensive and prolonged downturn that affects the economy as a whole.