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In a recession, a decrease in consumer spending causes many businesses

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In a recession, a decrease in consumer spending causes many businesses [#permalink]

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New post 21 Dec 2017, 05:51
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74% (01:47) correct 26% (01:20) wrong based on 90 sessions

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In a recession, a decrease in consumer spending causes many businesses to lay off workers or even to close. Workers who lose their jobs in a recession usually cannot find new jobs. The result is an increase in the number of people who are jobless. Recovery from a recession is defined by an increase in consumer spending and an expansion of business activity that creates a need for additional workers. But businesspeople generally have little confidence in the economy after a recession and therefore delay hiring additional workers as long as possible.

The statements above, if true, provide the most support for which one of the following conclusions?

A. Recessions are usually caused by a decrease in Business people’s confidence in the economy
B. Governmental intervention is required in order for an economy to recover from a recession
C. Employees of businesses that close during a recession make up the majority of the workers who lose their jobs during that recession
D. Sometimes recovery from a recession does not promptly result in a decrease in the number of people who are jobless
E. Workers who lose their jobs during a recession are likely to get equally good jobs when the economy recovers
[Reveal] Spoiler: OA
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Re: In a recession, a decrease in consumer spending causes many businesses [#permalink]

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New post 21 Dec 2017, 06:20
Summary: Recovery from recession does not result immediately result in increase in employment.

A. Recessions are usually caused by a decrease in Business people’s confidence in the economy - Incorrect. It is not stated in the passage that decrease in business people's confidence will cause recession.

B. Governmental intervention is required in order for an economy to recover from a recession - Incorrect. Not a must be true statement.

C. Employees of businesses that close during a recession make up the majority of the workers who lose their jobs during that recession - Incorrect. Out of scope.

D. Sometimes recovery from a recession does not promptly result in a decrease in the number of people who are jobless - Correct.

E. Workers who lose their jobs during a recession are likely to get equally good jobs when the economy recovers - Incorrect. Out of scope.

Answer: D
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Re: In a recession, a decrease in consumer spending causes many businesses [#permalink]

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New post 21 Dec 2017, 06:49
anamika4 wrote:
Why not c

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The argument doesn't focus on the employees of the businesses that close during the recession.
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Re: In a recession, a decrease in consumer spending causes many businesses [#permalink]

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New post 21 Dec 2017, 11:00
Vyshak wrote:
anamika4 wrote:
Why not c

Sent from my Pixel 2 using GMAT Club Forum mobile app


The argument doesn't focus on the employees of the businesses that close during the recession.

Thanks

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Re: In a recession, a decrease in consumer spending causes many businesses   [#permalink] 21 Dec 2017, 11:00
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In a recession, a decrease in consumer spending causes many businesses

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