Understanding Recessions and Economic Indicators

What is one common definition of a recession according to the National Bureau of Economic Research?

• A decrease in consumer spending

• A decline in stock market prices

• A significant decline in economic activity lasting more than a few months

• An increase in unemployment rates

What does GDP stand for in economic terms?

• Global Development Plan

• Government Debt Percentage

• Gross Domestic Product

• General Domestic Production

What does the Leading Economic Index (LEI) primarily track?

• Government policies

• Consumer spending habits

• 10 different economic indicators

• Stock market trends

How does the Sahm Rule Recession Indicator signal a potential recession?

• By tracking stock market declines

• By monitoring a rise in the unemployment rate's moving average

• By observing changes in consumer spending

• By analyzing government fiscal policies

What does an inverted yield curve typically indicate?

• A strong economic growth

• A potential upcoming recession

• A decrease in government spending

• An increase in consumer confidence

What is the significance of a steepening yield curve?

• It indicates a recession has ended

• It reflects a decrease in unemployment rates

• It signals a potential recession warning

• It shows an increase in stock market prices

Why is it important to maintain a diversified portfolio during a recession?

• To increase exposure to high-risk stocks

• To reduce the risk of large losses

• To focus solely on cash investments

• To maximize short-term profits

Which asset class has historically performed best during the last six recessions?

• Cryptocurrency

• Real estate

• Bonds

• Stocks

What is a defensive asset class during a recession?

• Bonds and cash

• Technology stocks

• Real estate

• Luxury goods

Which stock sectors have shown strong performance relative to the S&P 500 during recessions?

• Energy and utilities

• Travel and leisure

• Consumer staples and health care

• Real estate and construction