Which of these events would most likely cause a recession?

Question

Which of these events would most likely cause a recession?

A.
The price of gasoline rises by ten percent.

B.
Political leaders pass large spending cuts.

C.
Many people find new jobs at the same time.

D.
The value of total net exports rises unexpectedly.

Answer 1

B. Political leaders passing large spending cuts would most likely cause a recession as it would lead to a decrease in government spending, which can have a negative impact on the economy. This can lead to a decrease in demand for goods and services, which can lead to a decrease in production and employment, ultimately leading to a recession.