Question

How do consumers’ feelings about the economy help contribute to growth?

Positive consumer attitudes influence spending habits.
Positive consumer attitudes increase job prospects.
Positive consumer attitudes inspire increased production.
Positive consumer attitudes can end a depression.

Answer 1

Answer: the first three are correct; the fourth is overstated.

- Positive consumer attitudes influence spending habits — true. When consumers feel confident they spend more, raising aggregate demand.
- Positive consumer attitudes increase job prospects — true (indirectly). Higher demand leads firms to hire more workers.
- Positive consumer attitudes inspire increased production — true. Firms ramp up output to meet stronger demand.
- Positive consumer attitudes can end a depression — false as an absolute. Confidence helps recovery, but a deep downturn typically requires broader adjustments (investment, fiscal/monetary policy, structural fixes) in addition to improved consumer sentiment.