Suppose small business owners decide to spend less.How will this affect an economy?
A)It will have no impact since this group makes up a small portion of any economy.
B)It will decrease the level of income of other people since one person's spending is someone else's income.
C)It will cause prices for many goods to increase.
D)It will increase the level of income in the economy since other groups will spend more.

Question

Quizplus · Accepted Answer

If small business owners spend less, it means they are reducing their demand for goods and services from other businesses. This reduction in demand will lead to a decrease in income for those businesses and their employees. As a result, the overall level of income in the economy will decrease, leading to a further decrease in consumer spending and potentially causing a recession or economic slowdown.

Suppose Small Business Owners Decide to Spend Less