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    Question

    The economy of Country Z is in a recession, with

    declining GDP, rising unemployment, and low consumer and business confidence. The government is considering implementing expansionary fiscal policies to stimulate the economy. Which of the following is NOT a typical characteristic of a recession?
    A Declining GDP. Correct Answer Incorrect Answer
    B Rising unemployment. Correct Answer Incorrect Answer
    C Low consumer and business confidence. Correct Answer Incorrect Answer
    D Increasing inflation. Correct Answer Incorrect Answer
    E Reduced investment. Correct Answer Incorrect Answer

    Solution

    Recessions are typically characterized by declining GDP, rising unemployment, low confidence, and reduced investment. Inflation tends to decrease or stabilize during recessions due to lower demand.

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