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Which of the following statements is correct​? A. Consumer confidence is extremely important and can have...

Which of the following statements is correct​? A. Consumer confidence is extremely important and can have a great impact on future economic activity. The same is not true of business confidence. B. Consumer and business confidence is extremely important and can have a great impact on future economic activity. C. Because it is subject to​ change, and frequently​ does, consumer and business confidence has only a minimal impact on future economic activity. D. Because it has historically remained​ steady, consumer and business confidence has only a minimal impact on future economic activity.

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Answer #1

The correct choice is option B

this is perhaps because the optimism and pessimism in the economic activity is brought about by the confidence that the consumers and businesses have in the economy. Both are significant in their own terms since consumption expenditure is the largest component of GDP and investment expenditure is the most volatile.

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