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In a Recession, Compared to the Percentage Decline in GDP

Question 1

Multiple Choice

In a recession, compared to the percentage decline in GDP, what happens to investment spending?


A) Investment spending falls by a larger percentage than GDP.
B) Investment spending falls by about the same percentage as GDP.
C) Investment spending falls by a smaller percentage than GDP.
D) Investment spending falls, but the percentage change is sometimes much larger and sometimes much smaller.

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