Increased purchases of discretionary items, such as cars and vacations, are common during periods of recession.

Question

Quizplus · Accepted Answer

During periods of recession, individuals and households tend to reduce their spending on discretionary items as they prioritize essential expenses such as housing, food, and healthcare. This is because unemployment rates increase and disposable incomes decrease during recessions, which means people have less money to spend on non-essential items like vacations and cars. Therefore, increased purchases of discretionary items during recessions are not common.

Increased Purchases of Discretionary Items, Such as Cars and Vacations