If all firms expect greater demand for their products or services,they will hire __________ resources (e.g.,labor and capital)and the economy will experience __________.
A)fewer; recession
B)fewer; growth
C)more; federal budget deficits
D)more; recession
E)more; growth

Question

Quizplus · Accepted Answer

If firms expect greater demand, they will need to increase their production capacity, which will require hiring more resources such as labor and capital. This will result in an expansion of the economy, causing economic growth. Therefore, option E is the correct choice. Options A, B, and D are incorrect because they suggest that the firms will hire fewer resources and this will lead to a recession, which is opposite to the given scenario. Option C is also incorrect because there is no direct correlation between hiring more resources and federal budget deficits.

If All Firms Expect Greater Demand for Their Products or Services,they