Which of the Following Statements About the Effects of Advertising

question 5

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 increase.
• 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 and monitored.
• E)Advertising does not affect the business cycle.

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Definitions:

Higher Profits

The increased financial gain achieved by a business when its revenue exceeds its expenses by a greater margin than before.

Costs

Costs refer to the amount of money required for the production of goods or services, including expenses related to labor, materials, and overheads.

Competitors

Entities or individuals that are in the same industry or market and vie for the same customers or resources.

Decrease Supplier Power

Involves strategies or actions taken by purchasing companies to reduce the influence and control of their suppliers over prices, terms, and supply.