A time of economic crisis or bad times in commerce, finance, and industry, characterized by falling prices, restriction of credit, low output and investment, many bankruptcies and a high level of unemployment (many people without jobs). A less severe crisis is usually known as a recession.

• A. Recession
• B. Crisis
• C. Slump
• D. Depression

Answer: (D)

These conditions describe a depression—the most severe, long-lasting downturn in economic activity, with falling prices, restricted credit, weak output and investment, many bankruptcies, and high unemployment. A recession is a less severe downturn that lasts a shorter period. The other terms are less precise: a slump is an informal, nonstandard label for a downturn, and a crisis is too broad and not specifically about the depth and duration of the economic contraction.