Praxis 5511 Practice Question
What occurs during an economic recession?
Correct Answer: D
Rationale: During an economic recession, consumer demand declines as individuals and businesses tend to reduce spending due to uncertainty and decreased income. This drop in demand can lead to lower sales for companies, further exacerbating economic challenges.
Option A is incorrect; tax revenues typically decrease during a recession as income and sales decline. Option B is also wrong; during a recession, imports often exceed exports due to reduced domestic production and consumption. Option C is misleading; companies usually lay off workers or halt hiring during a recession to cut costs, rather than expanding their workforce.
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