Which of the Following Is Most Indicative of a Recession

question 41

Multiple Choice

Which of the following is most indicative of a recession?

• A) a decline in unemployment
• B) a rise in inflation
• C) a decline in real GDP
• D) an increase in the interest rate

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Definitions:

Leverage Ratio

A financial metric measuring the amount of debt used by a company to finance its assets relative to the value of those assets.

Insolvent

Insolvent refers to the inability of an individual or organization to meet its financial obligations as they become due, due to a lack of sufficient assets.

Reserve Requirements

Regulations set by the central bank determining the minimum amount of reserves each bank must hold against deposits.

Fed

The Federal Reserve System, which is the central banking system of the United States responsible for monetary policy.