Question

5) When consumers are less confident about their jobs or incomes, they are more likely to:

A) reduce purchases of durable goods than nondurable goods.
B) reduce purchases of nondurable goods and increase purchases of durable goods.
C) increase investment spending and decrease consumption spending.
D) increase consumption spending and decrease investment spending.

Answer 1

Answer: a. Reduce purchases of durable goods than nondurable goods

Step-by-step explanation:

When consumers are less confident about their jobs or incomes, they are more likely to reduce purchases of durable goods than nondurable goods. They consider their income now and are considerate about their spendings.