If Households and Firms Cut Back on Spending Because They

question 59

Multiple Choice

If households and firms cut back on spending because they expect other households and firms to do so, and this self-fulfilling prophecy causes a recession, then this would be an example of:

• A) Insider-outsider relationships
• B) Efficiency wage theory
• C) A coordination failure
• D) A price-level surprise

---

Definitions:

Antenatal Screening

Testing that is done during pregnancy to assess the health and development of the fetus and the well-being of the mother.

Abnormal Radiological

Describes imaging results that deviate from the normal structure or function, indicating potential disease or injury.

Placenta Previa

A pregnancy complication where the placenta covers the opening of the cervix, potentially causing severe bleeding before or during delivery.

Hemorrhage

The escape of blood from a ruptured blood vessel, which can be internal or external.