With reference to a Double-Dip Recession, consider the following statements: 1. A double-dip recession refers to two consecutive quarters of negative GDP growth within the same business cycle. 2. It typically involves a brief recovery followed by another downturn, often worsened by reduced consumer demand and spending cutbacks. Which of the statements given above is/are correct? |ForumIAS

Q. With reference to a Double-Dip Recession, consider the following statements:
1.A double-dip recession refers to two consecutive quarters of negative GDP growth within the same business cycle.
2.It typically involves a brief recovery followed by another downturn, often worsened by reduced consumer demand and spending cutbacks.
Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: B

Notes:

Explanation:

Two consecutive quarters of negative GDP growth define a standard recession, not specifically a double-dip. A double-dip recession occurs when an economy first enters recession, then recovers briefly, and then dips into recession again — not just two back-to-back negative quarters.

A double-dip recession is marked by a short-lived recovery followed by another recession, often caused by weak demand due to layoffs and prior spending cuts, as explained in the passage.

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