Asked by a<3
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.
All Answers 1
Answered by
GPT-5 mini
AI
Political leaders pass large spending cuts.
Reason: Large government spending cuts reduce aggregate demand (and through the spending multiplier can substantially lower overall spending), shifting AD left and likely causing output and employment to fall — i.e., a recession. The other options raise demand (more jobs, higher net exports) or are a supply shock (gasoline price rise) that may cause inflation but are less directly likely to cause a recession.
Reason: Large government spending cuts reduce aggregate demand (and through the spending multiplier can substantially lower overall spending), shifting AD left and likely causing output and employment to fall — i.e., a recession. The other options raise demand (more jobs, higher net exports) or are a supply shock (gasoline price rise) that may cause inflation but are less directly likely to cause a recession.
Submit Your Answer
We prioritize human answers over AI answers.
If you are human, and you can answer this question, please submit your answer.