Bank Interview Question Answers
Q 1. What is Recession and How US slowdown hit Indian Economy?
Ans: In economics, the term recession generally describes the reduction of a
country's gross domestic product (GDP) for at least two quarters. The usual dictionary
definition is "a period of reduced economic activity", a business cycle contraction.
The United States-based National Bureau of Economic Research (NBER) defines
economic recession as: "a significant decline in the economic activity spread across
the country, lasting more than a few months, normally visible in real GDP growth,
real personal income, employment (non-farm payrolls), industrial production, and
In macroeconomics, a recession is a decline in a country's gross domestic product
(GDP), or negative real economic growth, for two or more successive quarters of a
An alternative, less accepted, definition of recession is a downward trend in the rate of
actual GDP growth as promoted by the business-cycle dating committee of the
National Bureau of Economic Research. That private organization defines a recession
more ambiguously as "a significant decline in economic activity spread across the
economy, lasting more than a few months." A recession has many attributes that can
occur simultaneously and can include declines in coincident measures of activity such
as employment, investment, and corporate profits. A severe or prolonged recession is
referred to as an economic depression.
What is Gross Domestic Product (GDP)?
The gross domestic product (GDP) or gross domestic income (GDI) is one of the
measures of national income and output for a given country's economy. GDP can be
defined in three ways, all of which are conceptually identical. First, it is equal to the
total expenditures for all final goods and services produced within the country in a
stipulated period of time (usually a 365-day year). Second, it is equal to the sum of the
value added at every stage of production (the intermediate stages) by all the industries
within a country, plus taxes less subsidies on products, in the period. Third, it is equal
to the sum of the income generated by production in the country in the period—that
is, compensation of employees, taxes on production and imports less subsidies, and
gross operating surplus (or profits). ……………………………….
Q. What is Inflation?
In economics, inflation is a rise in the general level of prices of goods and services in an
economy over a period of time. The term "inflation" once referred to increases in the money
supply (monetary inflation); however, economic debates about the relationship between
money supply and price levels have led to its primary use today in describing price inflation.
Inflation can also be described as a decline in the real value of money—a loss of purchasing
power in the medium of exchange which is also the monetary unit of account. When the
general price level rises, each unit of currency buys fewer goods and services. A chief
measure of price inflation is the inflation rate, which is the percentage change in a price index