Which of the Following Does NOT Occur as the Economy

question 92

Multiple Choice

Which of the following does NOT occur as the economy moves from an expansion to a recession?

• A) An initial decrease in autonomous spending is the trigger that creates the business cycle turning point.
• B) The change in planned spending exceeds the change in real GDP.
• C) The multiplier process reinforces any decrease in spending and pushes the economy into recession.
• D) Incomes fall during recessions as firms cut production in response to unplanned increases in inventories.

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Definitions:

Demand Curve

A graphical representation depicting the relationship between the price of a good and the quantity demanded by consumers, usually showing an inverse correlation.

Income Change

A variation in the amount of earnings received by a household or individual, which could arise from sources such as wages, investments, or benefits.

Price Change

Refers to the variance in the cost of goods or services over time, which can be an increase or a decrease.

Market Quantity

The total amount of a specific good or service that is available for purchase in a market at a given time.