Which best explains how a recovery period leads to a boom?

Question

Responses

decrease in unemployment resulting from low production costs

decrease in unemployment resulting from low production costs

natural disaster resulting in greater demand for housing construction

natural disaster resulting in greater demand for housing construction

reduction in consumer demand resulting from hyperinflation

reduction in consumer demand resulting from hyperinflation

increase in consumer demand resulting from a reduction in prices

Answer 1

The response that best explains how a recovery period leads to a boom is:

increase in consumer demand resulting from a reduction in prices.

During a recovery period, economic conditions typically improve, often leading to increased consumer confidence and spending. If prices decrease, this can further stimulate demand, as consumers are able to purchase more goods and services. This increase in consumer demand can then drive businesses to expand production, leading to economic growth and potentially a boom.