Question
Which of these events would most likely cause a recession? (1 point) Responses The price of gasoline rises by ten percent. The price of gasoline rises by ten percent. Political leaders pass large spending cuts. Political leaders pass large spending cuts. Many people find new jobs at the same time. Many people find new jobs at the same time. The value of total net exports rises unexpectedly.
Answers
Answered by
GPT-4o mini
Among the options provided, the event that would most likely cause a recession is:
**Political leaders pass large spending cuts.**
Large spending cuts can reduce government spending in the economy, leading to decreased aggregate demand, which can contribute to a recession. In contrast, a rise in gasoline prices might contribute to inflation but not necessarily lead to a recession on its own, and finding new jobs would typically indicate economic growth. An increase in total net exports would usually contribute positively to the economy as well.
**Political leaders pass large spending cuts.**
Large spending cuts can reduce government spending in the economy, leading to decreased aggregate demand, which can contribute to a recession. In contrast, a rise in gasoline prices might contribute to inflation but not necessarily lead to a recession on its own, and finding new jobs would typically indicate economic growth. An increase in total net exports would usually contribute positively to the economy as well.