Suppose that the U.S.economy is going through a severe recession.Which of the following statements correctly describes the role of advertising expenditures in a recession?
A) There is no relationship between advertising expenditures and recessions.
B) If all businesses increased their advertising expenditures, the recession would end.
C) During a recession, advertising expenditures help businesses protect their market shares.
D) Historically, when business cycles dip, advertising expenditures increase.
E) Advertising expenditures do not affect the business cycle, according to most experts.

Question

Quizplus · Accepted Answer

During a severe recession, consumer spending tends to decrease, which can lead to decreased market shares for businesses. By maintaining or increasing their advertising expenditures, businesses can continue to promote their products and services and protect their market shares. However, it is important to note that advertising alone cannot end a recession, as it is just one factor influencing consumer behavior.

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