Question

How does the business cycle affect consumers? Check all that apply.

It can be harder to find a job during an economic depression.
Prices on food and clothing will tend to decrease during an expansion.
People tend to make more money during an expansion.
It can be easier to find a job during an economic depression.
Prices on gas and food will tend to increase during an expansion.

Answer 1

- It can be harder to find a job during an economic depression. — True. Unemployment rises in downturns, so jobs are scarcer.
- People tend to make more money during an expansion. — True. Employment and wages generally rise as the economy grows.
- Prices on gas and food will tend to increase during an expansion. — True. Higher demand and inflationary pressure in expansions typically push prices up.

Not true:
- Prices on food and clothing will tend to decrease during an expansion. — False (they more often rise).
- It can be easier to find a job during an economic depression. — False (the opposite is true).