ECONOMICS (CBSE/UGC NET)

ECONOMICS

FISCAL POLICY

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

If the U.S. economy moves into recession due to a decline in consumer confidence, which of the following do we not expect?

A	The U.S. dollar will depreciate.
B	The U.S. interest rate will fall.
C	GDP in other countries will expand.
D	None of the above

Explanation:

Detailed explanation-1: -What Happens in a Recession? Economic output, employment, and consumer spending drop in a recession. Interest rates are also likely to decline as the central bank (such as the U.S. Federal Reserve Bank) cuts rates to support the economy.

Detailed explanation-2: -According to a general definition of recession-two consecutive quarters of negative gross domestic product (GDP)-the U.S. entered into a recession in the summer of 2022.

Detailed explanation-3: -To help accomplish this during recessions, the Fed employs various monetary policy tools in order to suppress unemployment rates and re-inflate prices. These tools include open market asset purchases, reserve regulation, discount lending, and forward guidance to manage market expectations.

Detailed explanation-4: -Retail. According to economists, the retail industry is among the industries most affected by recession in 2023. Restaurant. Travel & Tourism. Real Estate. Manufacturing. 28-Nov-2022

There is 1 question to complete.