When There Is a Recession (A Fall in Output)and Prices

question 135

Multiple Choice

When there is a recession (a fall in output) and prices are increasing, and this situation is caused by adverse supply shocks, the term economists use to describe it is

• A) aggregate shifts.
• B) stagnation.
• C) inflation.
• D) stagflation.

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Definitions:

World System Theory

A socioeconomic theory that views the global economy as a complex system governed by a capitalist world economy divided into core, semi-periphery, and periphery countries.

Global Inequality

The uneven distribution of resources, wealth, opportunities, and power across countries and populations worldwide.

Trickle-down Economics

An economic theory that advocates reducing taxes on businesses and the wealthy in society as a means to stimulate business investment in the short term and benefit society at large in the long term.

Dependency Theory

A theory in international relations and economic development positing that resources flow from a "periphery" of poor and underdeveloped states to a "core" of wealthy states, perpetuating neocolonial dependency.