Question

During the early 1990s, the American economy was:

A) spiraling into a depression.
B) the wealthiest in the world.
C) dependent on aid from Western Europe.
D) less well-off than in previous years.

Answer 1

Answer:

The right answer is:

A) spiraling into a depression.

Explanation:

The Gulf War of 1990-91 achieved its goals but it caused the oil prices to skyrocket. The oil shock hit the economy, it contributed to lower levels of consumer and business confidence. It led to a short-term recession. The economy had been already weakened by a restrictive monetary policy followed by the Federal Reserve.

Answer 2

Answer: less well-off than in previous years.

USATestPrep Answer