The nation of Forlornistan is reporting a decline in GDP for the fourth consecutive year, with no relief in sight. With unemployment at record levels and businesses failing faster than at any time in the past century, Forlornistan is likely experiencing a depression. True or False True False

According to the National Bureau of Economic Research, an economic depression is reached when GDP is falling for more than two consecutive years. Forlornistan is reporting a declina in GDP for the fourth consecutive year, therefore, the country is experiencing an economic depression.

Economic depressions are worse than recessions. They are characterized by very high levels of unemployment, a general lack of credit availability either due to banking failure or lack or money supply, and reduced economic exchange.

Forlornistan is experiencing some of those symptoms: unemployment is at record levels, and businesses are failing, probably either due to lack of credit, or lack of demand.