Attempts: 2. What triggers economic fluctuations Select the most likely outcome

Question

Attempts: 2. What triggers economic fluctuations Select the most likely outcome for each of the following steps to show the expected result of the following scenario: Average: 14 Aa Aa A large number of consumers believe that there will be a recession in the near future. Consumers start saving more and spending less Businesses start to produce more and hire more workers Production, income, and spending increase (expansion) QNA Save &Continue; 3.16 © 2004-2016 Aplia. Au rights reserves. 2013 Cengage Leaming except as noted. Al rights reserved Grade It Now End

Explanation / Answer

When consumers believe that there will be recession in future then they start saving their money.

1. consumers starts saving more and spend less

Decrease in spending decreases demand of goods. As a result, firms starts reducing their production and workers will be laid off.

2. Businesses starts to produce less and lay off workers

When workers become unemployed and some workers have job left, then there spending on goods decreases.

3. Workers cut back on spending for a variety of consumer goods.

4. Production, income and spending decline (recession).

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