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Which Best Describes The Nature Of Cause And Effect In The Context Of The Business Cycle?

Answer :

A. Demand falls, causing production to stay at its peak.

B. Goods are overproduced, causing a surplus in jobs.

C. Consumers spend less, causing worker layoffs.

D. A recession begins, causing consumers to spend more.

Correct Answer: C. Consumers spend less, causing worker layoffs.

"Consumers spend less, causing worker layoffs" best describes the nature of cause and effect in the context of the business cycle. When consumers spend more and buy more, companies spend more on production and hire more workers to meet the demand. Conversely, if consumers spend less, organizations decrease production and lay off workers.

Related Question: Which of the Following is not be a Warning Sign of a Scam When Buying a Car or Other Big Purchases?

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