As most of you answered it incorrectly- Remember 2 things - | IASFolks™

As most of you answered it incorrectly- Remember 2 things -

1. What is recession? - Negative Real GDP Growth for 2 consecutive quarters. Now understand there is difference between Negative gdp growth and Declining GDP Growth. A GDP growth from 8% to 4% will be termed as declining GDP growth where a country is still growing, only the growth has slowed down a bit. And Negative GDP growth means eg - gdp growth goes from 4% to -(minus 2)% . Now the GDP in real sense has declined.

So, we can immediately reject option 3. For option 2 - Nominal GDP includes inflation also... suppose a scenario where a country is in recession but inflation is so high that it looks like gdp is rising... In that case a recession period May not be reflected in nominal terms.

You will be left with Real GDP only... and with conceptual understanding also... always growth is measured in with respect to real GDP not in nominal. Thus a negative growth must reflect a decrease in real GDP.

2. Focus on helping verb. There is difference between ‘shall’ and ‘may’