Extract A
The nation's current account deficit narrowed unexpectedly in the third quarter as service exports rebounded strongly. The overall trade deficit shrank to £4.2 billion, the lowest quarterly deficit in two years. This improvement was driven by a 4.5% surge in financial and digital service exports to key global markets. However, high domestic inflation and supply chain bottlenecks continue to threaten the sustainability of the domestic expansion. Economists warn that rising interest rates, designed to curb persistent inflation, could dampen consumer spending and business investment, threatening to drag the nation back into a recession. The treasury hopes that structural reforms and rising productivity will sustain economic growth without generating unsustainable trade imbalances.
Define the term 'recession' (Extract A, line 7).
327 exam-style questions on AQA A Level Economics 2.3 Economic performance, covering 2.3.1 Economic growth and the economic cycle, 2.3.2 Employment and unemployment, 2.3.3 Inflation and deflation, and 2.3.4 Possible conflicts between macroeconomic policy objectives. Each one has a worked solution and a mark scheme showing where the marks go.