1 In general, a recession does which of these?C.13.d A generates a response by state governments B generates a response by the federal government C leads to higher cost of living D reduces the unemployment level

## Step 1<br />A recession is a significant decline in economic activity that lasts more than a few months. It is visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. <br /><br />## Step 2<br />During a recession, the economy contracts, which means that the economic activities are decreasing. This contraction in the economy can lead to a decrease in the cost of living, not an increase. Therefore, option C is incorrect.<br /><br />## Step 3<br />Recessions can lead to an increase in unemployment levels, not a decrease. This is because businesses may not be able to afford to keep as many employees during a recession, leading to layoffs and an increase in unemployment. Therefore, option D is incorrect.<br /><br />## Step 4<br />Recessions can lead to a response from the federal government. The federal government may implement measures to stimulate the economy and reduce the impact of the recession. Therefore, option B is correct.<br /><br />## Step 5<br />Recessions can also lead to a response from state governments. State governments may implement measures to stimulate the economy and reduce the impact of the recession. Therefore, option A is correct.