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One in the News Article Titled "Consumer Spending Drops 1

Question 128

Multiple Choice

One In the News article titled "Consumer Spending Drops 1 Percent" suggests that the drop in consumer spending in late 2008 was worrisome for the economy because


A) Interest rates could not be lowered further to compensate for the drop in consumer spending.
B) Consumer spending accounts for nearly two-thirds of GDP.
C) Foreigners would not likely be buying many U.S.exports to offset the fall in domestic spending.
D) Many economists had forecast a fourth quarter economic rebounD.The fall in consumer spending in September and October of 2008 did not bode well for the fourth quarter,typically the biggest quarter for U.S.retailers; additionally,since consumer spending represents two-thirds of GDP,a drop would have a large negative impact on the economy.

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