The Degree to Which _____ Declines During a Recession or Increases

question 60

Multiple Choice

The degree to which _____ declines during a recession or increases during an expansion depends on the amount by which the ADand/or AS curves shift.

• A)real GDP
• B)nominal GDP
• C)the money supply
• D)real interest rate
• E)the consumer price index

---

Definitions:

Eurocurrency

Money deposited in a financial centre outside the country whose currency is involved.

Currency Swap

An agreement between two parties to exchange the principal amount and interest in two different currencies.

Spot Market

A market where financial instruments or commodities are traded for immediate delivery.

Expected Inflation

The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling, as anticipated by consumers, investors, and economists.