Depression
An economic depression is an exceptionally severe and prolonged downturn in economic activity. The term has no single universally accepted numerical threshold. It is generally used for disruption substantially deeper or more persistent than an ordinary recession, often involving major employment and financial-system problems.
Worked example
A hypothetical economy experiences years of sharply reduced output, widespread business failure and persistent mass unemployment. Those features could justify describing the period as a depression, rather than using the term for one weak quarter.
Common mistake
Inventing a fixed official threshold or calling every recession a depression.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | BT | Supporting | September 2026–June 2027 |
| FIA | FBT | Supporting | September 2026–June 2027 |