Which of the Following Scenarios Explains Why Uncertainty Can Lead

question 64

Multiple Choice

Which of the following scenarios explains why uncertainty can lead to increased volatility in economic fluctuations from investment?

• A) You are not sure whether your fiancé will retain his job in the uncertain economic environment,so you decide not to purchase a home with him.
• B) Your firm starts laying off workers and you are not sure whether you will keep your job,so you reduce your spending by half.
• C) Your friend warns you that your bank is about to collapse,so you withdraw your savings from that bank.
• D) You anticipate a recession may be coming,so you reduce the number of hours you work.