The Mini Recession That Canada Experienced at the Beginning of 2015

question 44

Multiple Choice

The mini recession that Canada experienced at the beginning of 2015 was most likely caused by

• A)a drop in investment spending.
• B)a drop in consumption spending.
• C)a drop in government spending.
• D)a drop in net exports.
• E)a drop in aggregate supply.

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Definitions:

Diversification

An investment strategy aimed at reducing risk by allocating investments among various financial instruments, industries, or other categories.

High Dividends

The distribution of a portion of a company's earnings, decided by the board of directors, to its shareholders, which is considered high relative to other companies or historical payouts.

Moral Hazard

The situation in which an entity has the incentive to take undue risks because the cost of those risks will be borne, at least in part, by others.

Firm-Specific Risk

The risk associated with an individual company, which can be reduced through diversification in investment.