CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

A recession is likely to occur if there is a(n) ______.
A. unanticipated decrease in aggregate demand and supply
B. unanticipated decrease in aggregate demand but increased (unplanned) supply
C. decrease in demand only (no matter whether it is anticipated or not)
Explanation: Recessions occur because prices in the goods and services market are low relative to costs of production. Two reasons are unanticipated reduction in aggregate demand and unfavorable supply shocks.

User Contributed Comments 2

User Comment
jnptrsn1 Would either/or be more appropriate?
Sesshy1987 Yes. It would be.
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