What characterizes a period of economic recession?

A period of economic recession is characterized by decreased levels of investment and spending, which is reflected in the correct answer. During a recession, economic activity slows down significantly. Businesses may cut back on their investments due to uncertainty about future economic conditions, leading to reduced capital expenditures and hiring. Consumers also tend to spend less because of fears about job security and falling incomes. This decrease in spending and investment contributes to a downward spiral in economic activity, reducing GDP and often resulting in higher unemployment rates.

The other options describe conditions typically associated with economic growth rather than recession. Rapid economic growth would lead to increased investment and consumer spending, high levels of employment signify a robust job market, and increased wages across sectors usually reflect a healthy economy with strong demand for labor. These factors counteract the defining characteristics of a recession, where overall economic contraction is prevalent.