What is a key characteristic of economic recession?

A key characteristic of an economic recession is decreased consumer spending and production. During a recession, economic activity slows down, leading to lower levels of consumer confidence. As people become more cautious about their financial situations, they tend to spend less on goods and services. This drop in consumer spending directly impacts businesses, causing them to scale back production in response to reduced demand. Consequently, businesses may also lay off workers or freeze hiring, which can contribute to rising unemployment rates and further decrease consumer spending, creating a cycle that exacerbates the economic downturn.

The other options do not reflect the realities associated with a recession. For example, increasing employment rates and stable economic growth are indicative of a healthy economy, and higher stock market performances typically represent investor confidence and economic expansion, neither of which align with the characteristics of a recession.