Which of the following can result from an oversupply of goods and services coupled with insufficient money to purchase them, potentially causing economic recession?

Question

Quizplus · Accepted Answer

When there is an oversupply of goods and services but insufficient money to purchase them, this can result in a decrease in prices (deflation) as businesses try to incentivize consumers to buy their products. However, this decrease in prices can lead to a decrease in profits for businesses, potentially causing economic slowdown or recession. A depression (choice A) is a severe and prolonged recession, usually defined by a decrease in GDP for two consecutive quarters. Inflation (choice B) occurs when there is too much money in circulation, causing prices to rise. Hyperinflation (choice C) is an extreme form of inflation where prices rise at an extremely rapid rate, often leading to economic collapse. These options are not the best choice for this scenario.

Which of the Following Can Result from an Oversupply of Goods