Reference no: EM132405705

The primary determinant of economic activity is real GDP. The relationship between the real gross domestic product and the potential GDP is a good measure of the performance of the economy relative to the potential. Analyze the GDP data and comment on U.S. recessions since the World War II. Answer the following questions:

• How many recessions have there been since 1949?
• What has been the longest time between recessions?
• Have the severity of recessions decreased over the period after World War II?

To answer these questions, use the following information and do the additional reading given below.

The Business Cycle Dating Committee of the National Bureau of Economic Research is the group that defines when the U.S. economy is in a recession or expansion period. The Committee uses the following definitions: "A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough. Between trough and peak, the economy is in an expansion. Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades."