When an Economy Is in a Recession

question 34

Multiple Choice

When an economy is in a recession,

• A) strong demand for investment funds will push interest rates upward.
• B) strong demand for resources will push the prices of resources upward.
• C) the real interest rate will tend to rise.
• D) the unemployment rate will rise above its natural rate.

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Definitions:

Exporting

Selling domestically produced products to foreign markets.

Foreign Company

A business entity that is registered, operates, or is based in a country other than the one where it conducts most of its operations or sales.

Exporting

The act of sending goods or services to another country for sale.

Licensing

A business arrangement in which one company gives another company permission to manufacture its product for a specified payment.