PrepTest 41, Section 2, Question 13
Robin: When a region's economy is faltering, many people lose their jobs. As a result, spending on consumer goods declines, leading in turn to more lost jobs and a worsening of the economy. Eventually, the economy becomes so bad that prices collapse; the lower prices encourage people to increase spending on consumer goods, and this higher spending results in economic improvement.
Robin: When a region's economy is faltering, many people lose their jobs. As a result, spending on consumer goods declines, leading in turn to more lost jobs and a worsening of the economy. Eventually, the economy becomes so bad that prices collapse; the lower prices encourage people to increase spending on consumer goods, and this higher spending results in economic improvement.
Terry: People cannot increase their spending if they have no jobs and no money for anything other than basic necessities, so price collapses cannot lead to economic improvement.
Robin: When a region's economy is faltering, many people lose their jobs. As a result, spending on consumer goods declines, leading in turn to more lost jobs and a worsening of the economy. Eventually, the economy becomes so bad that prices collapse; the lower prices encourage people to increase spending on consumer goods, and this higher spending results in economic improvement.
Terry: People cannot increase their spending if they have no jobs and no money for anything other than basic necessities, so price collapses cannot lead to economic improvement.
Robin: When a region's economy is faltering, many people lose their jobs. As a result, spending on consumer goods declines, leading in turn to more lost jobs and a worsening of the economy. Eventually, the economy becomes so bad that prices collapse; the lower prices encourage people to increase spending on consumer goods, and this higher spending results in economic improvement.
Which one of the following, if true, most undermines Terry's objection to Robin's analysis?
Companies hire more workers after the economy starts to improve again, and many newly hired workers then make long-deferred purchases.
Even when economic conditions are worsening, consumers realize that the economy will eventually improve.
Even people who do not lose their jobs spend less in bad economic times and thus have savings available to spend when prices collapse.
People who have lost their jobs must continue to buy some basic goods such as food, even during bad economic times.
The prices of some consumer goods remain stable, even during a general price collapse.
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