Question

6. Which of these events would most likely cause a recession?

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1 point
The price of gasoline rises by ten percent.
A global pandemic.
Many people find new jobs at the same time.
The value of total net exports rises unexpectedly

Answer 1

A. This can be explained by what is happening currently. With the rise in gasoline prices, it is defined as inflation.
Inflation definition: rise in prices over a given period of time

Answer 2

The answer is A, or "The price of gasoline rises by ten percent."

Step-by-step explanation:

Periods of high oil prices frequently lead to periods of recession shortly after. It also affects the price of goods and services for which fuel enters in the production. When this happens, consumer spending falls. Each 10 percent increase in price of gas and oil prices means consumers spend an additional billions dollars a year to keep up with earlier spending patterns. Therefore, rising gas prices increase the risk of a recession.

I truly hope this helped you understand how gas prices are most likely to cause recessions and supply chain issues. Have a nice day :)