Association of Chartered Certified Accountants (ACCA) Certification Practice Test

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the ACCA Certification Exam with interactive quizzes and detailed explanations. Get a head start on your success with our comprehensive study tools.

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What is a *Slump or Depression* characterized by?

A rapid increase in business confidence
High levels of unemployment and low demand
Technological advancements and growth
Strong consumer spending and investment

The correct answer is: High levels of unemployment and low demand

A slump or depression is characterized by high levels of unemployment and low demand for goods and services. During such economic downturns, businesses face reduced consumer spending, leading to a decrease in production and, subsequently, job losses. As unemployment rises, individuals have less disposable income to spend, further exacerbating the decline in demand. This creates a vicious cycle where low demand leads to reduced business activity and employment, while high unemployment continues to suppress consumer confidence and spending. In contrast, other scenarios like a rapid increase in business confidence, technological advancements, and strong consumer spending signify economic growth rather than a slump or depression.