Canadian Securities Course (CSC) Practice Exam

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Study for the Canadian Securities Course Exam with our comprehensive practice test. Explore flashcards and multiple-choice questions, each with detailed hints and explanations. Prepare for your CSC exam with confidence!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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When GDP returns to its previous peak, what typically happens to investment and inflation?

Increase
Decrease
Remain unchanged
Cannot be determined

The correct answer is: Increase

When GDP returns to its previous peak, investment and inflation typically increase. It means that the economy is growing and businesses are confident in their future prospects, leading them to invest more. This increase in investment can also lead to an increase in consumer spending, further boosting economic growth and potentially causing inflation. Additionally, rising GDP can indicate increased demand for goods and services, which can also drive up inflation. It is difficult to determine how much investment or inflation may increase without more specific information about the current economic situation. Option B is incorrect because when GDP is increasing, it usually leads to higher investment and inflation. Option C is also incorrect because a return to previous peak GDP usually leads to changes in investment and inflation. Option D is incorrect because it is possible to determine the likely increase in investment and inflation based on historical patterns and current economic conditions.