Chapter 13, Problem 7AA

To determine

To choose: The term that best completes the given sentence.

Answer to Problem 7AA

The term that best completes the given sentence is indicate.

Explanation of Solution

Significant shifts in consumer spending on durable and luxury products may be an important measure of the economy. Rise in spending on consumption in those two categories usually reflect higher-income individuals. Whereas declines in spending can imply lower individual income or consumer trusts.

By shifting through boom and recessions, growth of economy does not increase consistently. Peaks are also associated with higher growth, but also higher inflation, while recessions are related to higher unemployment.

Economics Concept Introduction

Introduction: Expansion refers to the economic situation that comes out of recession. Monetary borrowing is cheap, companies are building of new products again and customers are beginning to spend. GDP is rising, income per capita is rising, unemployment is falling, and stock markets are generally performing well.