Which of the Following Is Likely to Happen When the Banking

question 160

Multiple Choice

Which of the following is likely to happen when the banking system of a country recuperates after a recession?

• A) Interest rates will increase.
• B) Firms will hire more workers.
• C) The aggregate price level will fall.
• D) Household consumption expenditure will fall.

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Definitions:

Additional Government Borrowing

The process by which the government incurs more debt through issuing bonds or taking loans to finance its expenditure beyond its income.

Higher Taxes

Refers to increased charges imposed by governments on individuals or entities' income, activities, or transactions.

U.S. Treasury Bonds

Long-term government debt securities issued by the United States Department of the Treasury with a maturity of more than 10 years.

Foreign Stock

refers to shares of a company based outside the investor's own country.