CAF-7 · Chapter 3 · Question 13 of 15
A country enters a severe economic recession. Which of the following is a business entity most likely to experience as a direct result?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) A decline in national income leading to reduced consumer demand
Explanation
During a recession, the national income falls, unemployment generally rises, and consumer confidence drops, leading directly to reduced consumer demand and lower spending across most sectors.
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