A Recession Is Best Defined as a Period During Which

question 108

Multiple Choice

A recession is best defined as a period during which

• A)the percentage of the population employed is declining
• B)employment,output,and income decline
• C)the price level is declining
• D)more resources are used
• E)the budget deficit and trade deficit are both growing

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Definitions:

Interest Rate

The percentage of a loan amount charged by lenders to borrowers for the use of their money, expressed as an annual percentage.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing what is lost by choosing one option over another.

Money Demanded

The total amount of money that households and businesses wish to hold at a given time, often influenced by interest rates.

Fed Buys Government Bonds

The action by the Federal Reserve to purchase government securities from the market, which increases the money supply and lowers interest rates.