Research on the Effects of Recessions on the Real Level

question 35

Multiple Choice

Research on the effects of recessions on the real level of GDP shows that

• A)recessions cause only temporary reductions in real GDP, which are offset by growth during the expansion phase.
• B)recessions cause large, permanent reductions in the real level of GDP.
• C)recessions cause both temporary and permanent declines in real GDP, but most of the decline is temporary.
• D)recessions cause both temporary and permanent declines in real GDP, but most of the decline is permanent.

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Definitions:

Firms

Firms are business entities established to produce goods or provide services with the goal of earning profits in a market economy.

Health Care System

An organized network of institutions, resources, and people intended to deliver health care services to meet the health needs of target populations.

United States

A country located in North America, consisting of 50 states and a federal district, recognized for its economic and military power globally.

Moral Hazard

The risk that one party to a contract can change their behavior to the detriment of another after the contract has been concluded.