O-LevelEconomicsGovernment and the macroeconomy2281/11 · May/June 2022 · Q231 Mark
Why would standards of living fall when there is a recession?
AThe government would increase taxes to combat the recession.
BThe purchasing power of households would fall.
CThe value of the domestic currency would increase.
DThere would be a rise in the level of immigration.
✓ Correct answer
B: The purchasing power of households would fall.
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