- 08/08/2019 at 10:39 pm #1623579EduGorillaKeymasterSelect Question Language :
Direction: In the following passage, there are blanks each of which has been numbered. These numbers correspond to the question numbers; against each question, five words have been suggested, one of which fills the blanks appropriately.
GDP fluctuates because of the business cycle. When the economy is booming, and GDP is rising, there comes a point when inflationary (109) build up rapidly as labor and productive capacity near full utilization. This leads the central bank to (110) a cycle of tighter monetary policy to cool down the overheating economy and quell inflation. As interest rates rise, companies and consumers cut back their spending, and the economy slows down. Slowing demand leads companies to lay off employees, which further (111) consumer confidence and demand. To break this vicious circle, the central bank eases monetary policy to stimulate economic growth and employment until the economy is booming once again. Rinse and repeat. Consumer spending is the biggest (112) of the economy, accounting for more than two-thirds of the U.S. economy. Consumer confidence, therefore, has a very (113) bearing on economic growth. A high confidence level indicates that consumers are willing to spend, while a low confidence level reflects uncertainty about the future and an unwillingness to spend.
Find out the appropriate word in each case.
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