Question

Which of the following best explains what happens when unemployment

increases during a recession?

Answer 1

The answer is "There's a depression."

Answer 2

The correct response is the recession worsens into a depression.

Step-by-step explanation:

High unemployment during a recession can spark a depression where the economy contracts significantly for a prolonged period. A common definition of a recession is when an economy experiences negative GDP growth for two quarters. There are no commonly agreed criteria to differentiate a depression or to define when the economic problems advance into a depression, but generally, a depression is understood as a longer period of time where there is a significant decline in income and employment opportunities.