What Is Generally True of Consumers in a Recession

question 56

Multiple Choice

What is generally true of consumers in a recession?

• A) Everyone suffers and cuts back on spending.
• B) The rich suffer as the poor cut back on spending.
• C) Many reallocate spending and buy less on credit cards.
• D) Everyone cuts back on spending, but only the low-income consumer segments suffer.

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Definitions:

Total Income

The summation of all earnings or revenue generated by an individual or entity, before any deductions or taxes.

Income Share

The proportion of total national or group income that is received by individuals, households, or classes of income earners.

Entrepreneurs

Visionary individuals who create, manage, and assume the risks of a new business venture, bringing new products or services to the market.