Which of the following typically occurs during a recession?

• A. Inflation rates accelerate rapidly
• B. Consumer spending rises significantly
• C. Gross Domestic Product (GDP) grows faster than usual
• D. Unemployment rates increase

Answer: (D)

Verified step by step guidance

1. Step 1: Understand what a recession is — it is a period of economic decline typically characterized by a decrease in GDP for two consecutive quarters.
2. Step 2: Recall the typical economic indicators during a recession: GDP growth slows down or becomes negative, consumer spending usually decreases, and unemployment rates tend to rise.
3. Step 3: Analyze each option: Inflation rates accelerating rapidly is uncommon during recessions because demand usually falls; consumer spending rising significantly contradicts the typical drop in demand; GDP growing faster than usual is the opposite of what happens in a recession.
4. Step 4: Recognize that unemployment rates increase during recessions because businesses reduce production and lay off workers due to lower demand.
5. Step 5: Conclude that the correct characteristic of a recession from the given options is the increase in unemployment rates.