A Third of World Forecast to be in Recession in 2023

The International Monetary Fund (IMF) has cut its outlook for global economic growth in 2023 due to the war in Ukraine as well as higher interest rates as central banks around the world attempt to rein in rising prices.—bbc.com

Answer the following questions to check your understanding of the story.

How does the war in Ukraine lower global economic growth?

The war in Ukraine lowers global economic growth by decreasing the supply of oil and gas from Russia, which ______________.

a) increases short-run aggregate supply, and lowers the price level

b) decreases aggregate demand and raises the price level

c) increases aggregate demand and raises the price level

d) decreases short-run aggregate supply, and decreases real GDP

How do higher interest rates lower global economic growth?

Higher interest rates lower global economic growth by decreasing ______________, which decreases ___________, and lowers real GDP.

a) consumption; short-run aggregate supply

b) investment; aggregate demand

c) consumption; aggregate demand

d) investment; short-run aggregate supply

A Third of World Forecast to be in Recession in 2023

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