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Chapter 1: Problem 38

Each of the following happened during the Great Recession except (LO6) a) a financial crisis b) the loss of more than 8 million jobs c) a sharp rise in the inflation rate d) a sharp decline in our output of goods and services

Short Answer

Expert verified
The correct answer is c) a sharp rise in the inflation rate because it is the only statement that did not happen during the Great Recession. Instead of a sharp rise, there was a fear of deflation during that time.

Step by step solution

01

Review main characteristics of the Great Recession

During the Great Recession, there was a financial crisis, loss of jobs, decline in output, and changes in inflation rates. The financial crisis, job loss, and output decline are well known facts, so our focus should be on identifying the inflation rate trend during that time.
02

Analyze inflation rate during the Great Recession

During the Great Recession, the inflation rate didn't experience a sharp rise. Instead, there was a fear of deflation (negative inflation) due to lower demand and economic stagnation. So, the statement about a sharp rise in the inflation rate is not true.
03

Match the incorrect statement with the answer choices

Given the analysis in the previous steps, we can conclude that the incorrect statement is about the sharp rise in the inflation rate. Looking at the answer choices, we can identify: a) a financial crisis - True b) the loss of more than 8 million jobs - True c) a sharp rise in the inflation rate - False d) a sharp decline in our output of goods and services - True
04

Choose the correct answer

Since we have determined that the statement about a sharp rise in the inflation rate is incorrect, the correct answer is: c) a sharp rise in the inflation rate

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Most popular questions from this chapter

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