Which event most likely explains renewed demand in a recovery period?

Which event most likely explains renewed demand in a recovery period?

A. Consumers choose to save more and spend less.

B. Economic policy renews consumer confidence and demand.

C. Producers decrease prices to prompt demand and recovery.

D. Production decreases to prompt increased demand.

Answer – B. Economic policy renews consumer confidence and demand.

The event helps in explaining the renewed demands within the recovery period and this is related to the economic policy that renew the consumer demand and confidence. Major reasons behind this aspect that recession can occur due to the drastic fall related to demands for the produced goods. Economic recovery can be defined as the cycle of a business that occurs after recession and is mainly characterized by the sustained period related to improvement of the business activities. During the period related to economic recovery GDP or gross domestic product grows, the incomes rise and the levels of unemployment can fall as economy starts to rebound. Recovery phase is considered to be the period which is between previous trough and time when an economy achieves the previous peak levels of the real GDP (Gauthmath.com 2024). The phase of expansion is from a certain point until it reaches the next peak. Economic policies have the power of increasing the confidence levels of consumers and the demands within the market. The economic responses that are provided by the governments can have a huge influence on the economic and human aspects of the GDP growth levels. The reason behind rejecting the first option “A. Consumers choose to save more and spend less.” is mainly related to lack of impact that is consumers can have on enhancement of the renewal of confidence levels of consumers on the market. The reason behind rejection of the third option “C. Producers decrease prices to prompt demand and recovery.” is related to the low impact that the producers can have on increasing demands and ensuring recovery of the economy. The reason behind rejection of the fourth option “D. Production decreases to prompt increased demand.” is related to the lack of appropriate influence of the production processes on increasing the levels of demands.