An economy is moving towards very weak growth. What consequences can be expected on the horizon?

Question

BlackTom AI · Accepted Answer

When an economy grows very weakly, demand is subdued and prices tend to fall or remain under pressure as firms compete and spending slows. 
Option a: 'negative nominal interest rate'—While central banks may try to stimulate the economy by cutting rates, a negative nominal rate is not a guaranteed or universal consequence of very weak growth. It depends on policy decisions and the inflation outlook; not all economies adopt or sustain negative rates in such a scenario. 
Option b: 'deflation'—This is a plausible and common consequence. With weak growth, weak demand can lead to downward pressure on the general price level, i.e., deflation, as firms lower prices to attract buyers and debt burdens become harder to service in real terms. 
Option c: 'Increased cost of debt'—Weak growth can raise perceived risk and borrowing costs, but the cost of debt for borrowers depends on monetary policy, credit conditions, and inflation expectations. It is not a guaranteed outcome in all cases, especially if policymakers keep rates low or liquidity plentiful. 
Option d: 'All'—Since not every one of the preceding statements is guaranteed (e.g., negative nominal rates are not automatically triggered everywhere, and increased debt costs are not a universal outcome), this option overstates the set of consequences. 
Putting it together, the most consistent and direct consequence given very weak growth is deflation, while the other options describe possible but not certain or universally applicable outcomes.

An economy is moving towards very weak growth. What consequences can be expected on the horizon?单项选择题

类似问题

An economy is moving towards very weak growth. What consequences can be expected on the horizon?

Question at position 11 Economic conditions of a country would include which of the following elements?Whether contracts are recognized and enforceableCivil unrest or political upheavalCorruption and fraudExchange rates and inflation

What is the primary focus of macroeconomics?

Which discipline studies the economy as a whole or its basic subdivisions or aggregates? BlackTom题目解析

(Microeconomics/Macroeconomics) is the discipline that examines the performance and behavior of an economy as a whole. BlackTom题目解析

Macroeconomics involves the economic issues of:

Which of the following is NOT a typical question addressed by macroeconomics?

Which of the following is a Macroeconomics topic rather than a Microeconomics topic?

更多留学生实用工具

智能学习助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单