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.
Explanation: When consumers believe the economy is struggling, they tend to reduce their spending due to fear of financial uncertainty. This decrease in consumer spending leads businesses to produce less, as they anticipate lower demand for their products. As businesses scale back production, they may also reduce their workforce, resulting in rising unemployment. This creates a cycle that can further impact the economy negatively.