14
QuizMultiple Choice

Investing and Financial Markets — Unit test

Question 14 • Personal Finance - EL3403

Does a depression always follow a recession?

Answer
Y
Yes, the trough is always considered a depression.
N
No, a depression is indicated when the recession is exceptionally long.
Y
Yes, for recovery to occur, the trough must be reached.
N
No, the economy could decline quickly and bypass recession.

Explanation

A depression is generally a recession that is exceptionally severe or prolonged, so it does not follow every recession. A recession can end with a recovery without becoming a depression. Therefore, the correct choice is “No, a depression is indicated when the recession is exceptionally long.”

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