The news of an impending recession in the economy will lead to a:
(i) fall in consumption.
(ii) rise in precautionary saving.
(iii) rise in national saving.
(iv) rise in consumption.
A)(i) and (iii)
B)(ii) only
C)(i), (ii), and (iii)
D)(i), (ii), (iii), and (iv)

Question

Quizplus · Accepted Answer

The news of an impending recession typically leads to a fall in consumption as individuals and businesses become more cautious with their spending. This caution also leads to a rise in precautionary saving, as people save more to protect themselves against potential economic hardship. However, the impact on national saving is more complex and can vary depending on other factors such as government policy responses.

The News of an Impending Recession in the Economy Will