A recession begins with a(n) _ in spending by firms on capital goods and a(n) _ in spending on durable goods by households

Business Dec 24, 2020

A recession begins with a(n) _____ in spending by firms on capital goods and a(n) _____ in spending on durable goods by households.

a.increase; increase

b.increase; decrease

c.decrease; increase

d.decrease; decrease

Expert Solution

The correct option is d.decrease; decrease

Explanation:

Recession refers to the phase of business cycle that describes the slowdown of economic activities within the geographical area of a nation. It is the situation when household spending decreases due to which firms spend less on the production of products and services as well as on capital goods.

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