Which of the following best explains what happens when consumers think the economy is struggling? A. People spend more, businesses produce less, and unemployment rises.
B. People spend more, businesses produce a lot, and unemployment is low.
C. People spend less, businesses produce too much, and unemployment is low.
D. People spend less, businesses produce less, and unemployment rises.
The correct answer is D. People spend less, businesses produce less, and unemployment rises.
When consumers believe the economy is struggling, they typically become more cautious with their spending. This leads to decreased demand for goods and services, causing businesses to reduce their production. As a result, businesses may need to cut costs, often leading to layoffs and higher unemployment rates. This cycle can contribute to a further slowdown in the economy.