During a recession,consumers hold more money by cutting back on their spending,resulting in _____ in inflation and _____ in real growth.
A) a decrease;an increase
B) a decrease;a decrease
C) an increase;an increase
D) an increase;a decrease

Question

Quizplus · Accepted Answer

When consumers hold more money by cutting back on their spending during a recession, the demand for goods and services decreases, causing a decrease in inflation. Additionally, as production and employment also decrease due to reduced demand, it results in a decrease in real growth. Therefore, option B is the correct answer.

During a Recession,consumers Hold More Money by Cutting Back on Their