Question

Which of the following reflects a “bust” phase in a capitalist economy?

(1 point)

Employment, profits, and incomes are low.


Consumer demand encourages businesses to expand production.


Spending on goods from all businesses is high.


Demand is high, supply is high, and employment is low.

Answer 1

Employment, profits, and incomes are low.

Explanation: A "bust" (recession/depression) is characterized by falling demand, reduced production, and thus low employment, profits, and incomes. The other choices describe expansion/high demand.