What is the term for a sustained decline in economic activity, often measured by GDP, employment, and spending?

The term that describes a sustained decline in economic activity, often indicated by decreases in gross domestic product (GDP), employment rates, and consumer spending, is recession. During a recession, economic activity contracts, leading to increased unemployment and reduced consumer confidence, ultimately resulting in lower spending. This economic downturn typically lasts for several months and can have widespread effects on businesses and households.

In contrast, expansion refers to a period of economic growth following a recession, while recovery denotes the phase where the economy begins to rebound from a downturn. Depression, on the other hand, is a more severe and prolonged form of economic stagnation, characterized by significantly declining economic conditions that last for several years. Understanding these terms helps to clearly distinguish between different phases of the economic cycle.