Which of the following behaviors is more likely to occur in a strong (good) economy?

• A. Consumers increase their spending on goods and services.
• B. Unemployment rates rise significantly.
• C. Businesses reduce production due to low demand.
• D. Government tax revenues decrease sharply.

Answer: (A)

Verified step by step guidance

1. Understand the characteristics of a strong (good) economy: typically, it features higher consumer confidence, increased spending, low unemployment, and growing business activity.
2. Analyze the behavior of consumers in a strong economy: with more confidence and income, consumers are more likely to increase their spending on goods and services.
3. Consider the unemployment rate: in a strong economy, unemployment rates usually fall or remain low, not rise significantly.
4. Evaluate business production: businesses tend to increase production to meet higher demand in a strong economy, rather than reduce it.
5. Look at government tax revenues: with higher incomes and spending, tax revenues generally increase, not decrease sharply.