22
QuizMultiple Choice

The Business Cycle — Quiz

Question 22 • Economics

Which scenario best reflects the relationship between production and demand in a recession?

Answer
A
Car dealerships cannot obtain stock.
B
Car dealerships have minimal overstock.
C
Car dealerships are not restocking.
D
Car dealerships cannot sell their stock.

Explanation

In a recession, consumers and businesses typically spend less, so demand for goods falls. If production does not fall as quickly, businesses are left with more goods than they can sell. Car dealerships being unable to sell their stock best reflects this mismatch.

AI-written and checked against the verified answer.

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