Consider the following statements regarding Recession.1. A recession i

1.	Consider the following statements regarding Recession.1. A recession is a macroeconomic term that refers to a significant decline in general economic activity in a designated region.2. A significant rise in spending generally leads to a recession.3. India had been into recession only once since independence i.e., before Liberalisation.Which of the above statements is/are correct?1. 1 and 22. 1 only3. 2 and 3 only4. 1, 2 and 3 only
Answer» Correct Answer - Option 2 : 1 only The correct answer is 1 only A recession is a macroeconomic term that refers to a significant decline in general economic activity in a designated region. Hence, statement 1 is correct. It had been typically recognized as two consecutive quarters of economic decline, as reflected by GDP in conjunction with monthly indicators such as a rise in unemployment. A significant fall in spending generally leads to a recession. Hence, statement 2 is incorrect. Governments usually respond to recessions by adopting expansionary macroeconomic policies, such as increasing money supply or increasing government spending and decreasing taxation. In the past 69 years, India has seen a recession only thrice – as per available data – in fiscals 1958, 1966 and 1980. The reason was the same each time – a monsoon shock that hit agriculture, then a sizeable part of the economy. Hence, statement 3 is incorrect.

Consider the following statements regarding Recession.1. A recession is a macroeconomic term that refers to a significant decline in general economic activity in a designated region.2. A significant rise in spending generally leads to a recession.3. India had been into recession only once since independence i.e., before Liberalisation.Which of the above statements is/are correct?1. 1 and 22. 1 only3. 2 and 3 only4. 1, 2 and 3 only

Answer» Correct Answer - Option 2 : 1 only

The correct answer is 1 only

A recession is a macroeconomic term that refers to a significant decline in general economic activity in a designated region. Hence, statement 1 is correct.
It had been typically recognized as two consecutive quarters of economic decline, as reflected by GDP in conjunction with monthly indicators such as a rise in unemployment.
A significant fall in spending generally leads to a recession. Hence, statement 2 is incorrect.
Governments usually respond to recessions by adopting expansionary macroeconomic policies, such as increasing money supply or increasing government spending and decreasing taxation.
In the past 69 years, India has seen a recession only thrice – as per available data – in fiscals 1958, 1966 and 1980. The reason was the same each time – a monsoon shock that hit agriculture, then a sizeable part of the economy. Hence, statement 3 is incorrect.