When Consumers Are Very Reluctant to Spend in a Recessionary

question 220

Multiple Choice

When consumers are very reluctant to spend in a recessionary environment,the government's MOST effective strategy is to:

• A) increase spending through bond financing.
• B) decrease income taxes.
• C) decrease corporate taxes.
• D) do nothing;the economy will self-correct in the short run.

---

Definitions:

Normative Influence

The effect of the expectations of others on an individual's behavior, leading them to conform in order to be accepted or liked.

Normative Influence

The impact others have on us that causes us to comply with their behavior or beliefs to gain their approval and acceptance.

Social Contagion

The phenomenon where behaviors, attitudes, or emotions spread through groups or societies, akin to the transmission of diseases.

Injunctive Norms

Social norms that define what is perceived as approved or disapproved behavior within a group or society.