Question

During economic downturns the number of Americans without jobs increases. According to the principle that one person's spending is another person's income: Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices the reduction in spending by the unemployed workers will further lower incomes. the reduction in the number employed will reduce the costs of goods and services. the higher number of unemployed will increase enrollment into colleges. availability of workers will increase opportunities for new businesses.

Answer 1

Answer: The reduction in spending by the unemployed workers will further lower incomes

Explanation:

Economic downturn is when there's a reduction in the economic activity. During thus period, there's rising unemployment, reduction in investment, low consumer confidence etc.

Based on the principle that one person's spending is another person's income, the reduction in spending by the unemployed workers will further lower incomes. This is because an increase in the productive economic activity depends on cash transfers.

Since there's an economic downturn, there'll be a decrease in spending since there's less money available to the people, hence this will further lead to decrease in the income.