Which of the Following Is Likely to Be True When

question 155

Multiple Choice

Which of the following is likely to be true when an economy is in a boom?

• A) The size of the government expenditure multiplier is small.
• B) The size of the government expenditure multiplier is large.
• C) The unemployment rate is high.
• D) The inflation rate is negative.

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Definitions:

Trade Restrictions

Regulations or policies that countries adopt to limit the import and export of goods and services, often to protect domestic industries.

Secondary Effects

Unintended consequences of economic actions, which may manifest in areas not directly targeted by the initial action.

Unintended Consequences

Outcomes that occur as a result of actions or policies that were not anticipated or intended by the actors involved.

Economic Change

Shifts in economic conditions, such as growth, recession, or structural adjustments, affecting markets and societies.