A Medium-Sized Negative Shock

question 127

Multiple Choice

A medium-sized negative shock:

• A) always produces a medium-sized economic downturn.
• B) will not have a great impact on GDP.
• C) can cause a large economic downturn.
• D) will always cause a large economic downturn.

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Definitions:

Purchasing Power

The financial ability to buy products and services, which depends on income, prices, and the overall economic climate.

Social Security

A government program that provides financial assistance to people with inadequate or no income, especially the elderly, disabled, and families with children.

CPI

A metric known as the Consumer Price Index tracks the average price changes in a selected assortment of consumer items and services like medical care, transportation, and food, adjusting for their relative significance.

Price Inflation

The rate of growth in the overall price levels for goods and services, cutting down on purchasing capacity.