What signifies a recession in economic terms?

In economic terms, a recession is typically identified by two consecutive quarters of declining Gross Domestic Product (GDP). GDP reflects the total value of all goods and services produced within a country and is a primary indicator of economic health. When GDP decreases over two or more quarters, it signifies that the economy is contracting, leading to decreased consumer and business activity. This period of economic downturn usually involves reduced consumer spending, increased unemployment rates, and can lead to a general reduction in quality of life for many individuals.

The other options do not represent a recession. Increasing consumer spending typically indicates economic growth and confidence among consumers, while rising prices of goods denote inflation rather than a recession. Increased business expansion usually correlates with economic recovery or growth rather than a recession. Therefore, the clear definition of a recession as marked by declining GDP sets the correct answer apart.