Which of the Following Statements About the Effects of Advertising

question 52

Multiple Choice

Which of the following statements about the effects of advertising on the business cycle is true?

• A) Historically, when business cycles dip, advertising expenditures remain high.
• B) The increased advertising expenditures that occur during business cycle dips always produce an increase in personal consumption expenditures.
• C) When business cycles are down; advertising may act as a stabilizing force.
• D) The effect of advertising on business cycles is easily determined.
• E) Businesses that continue to advertise during a recession lose market share due to puffery and overexposure.

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Definitions:

Paid

The status of a financial obligation that has been fulfilled, indicating that no debt remains.

Year

A period of time consisting of 365 days, or 366 in a leap year, used as a basic unit of time to measure durations and align calendars.

Accumulated Depreciation

Accumulated depreciation accounts for the total amount of depreciation expense that has been claimed over the life of an asset, reducing its book value.

Balance Sheet

A report that lists a business's assets, obligations, and the equity of its shareholders on a specific date.