What is a major challenge posed by the economic environment to businesses?
Correct Answer: Economic recessions reduce consumer spending and demand.
- Step 1: Understand what an economic environment is. It includes factors like employment rates, inflation, and consumer spending.
- Step 2: Recognize what an economic recession is. It is a period when the economy slows down, and people spend less money.
- Step 3: Identify how a recession affects businesses. When people spend less, businesses earn less money.
- Step 4: Realize that reduced earnings can lead to challenges for businesses, such as cutting costs or laying off employees.
- Step 5: Conclude that a major challenge for businesses during a recession is the decrease in consumer spending and demand.
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