Which term describes a significant and sustained decline in economic activity across the economy?

The term that describes a significant and sustained decline in economic activity across the economy is "recession." A recession is typically characterized by a decline in GDP for two consecutive quarters, along with decreases in consumer spending, investment, and employment. This broad downturn affects multiple sectors within the economy and is marked by rising unemployment rates and reduced consumer confidence.

While terms like depression, stagflation, and deflation also relate to economic conditions, they have specific meanings that do not precisely match the definition of a sustained decline in economic activity. A depression refers to a more severe and prolonged downturn than a recession, often lasting several years. Stagflation describes a situation in which inflation and unemployment rise simultaneously, defying standard economic principles. Deflation indicates a decrease in the general price level of goods and services, which can occur during a recession but is not a direct measure of the decline in economic activity itself. Thus, "recession" is the most accurate term for the description given in the question.