During a recession , a. investment may not respond positively to low interest rates because of expectations of strong sales in the future. b. investment increases due to higher interest rates. c. investment responds strongly to lower interest rates since investment and interest rates are negatively related. d. investment may not respond positively to lower interest rates since low demand for goods leads to low capital utilization and low investment.

The correct answer is D) investment may not respond positively to lower interest rates since low demand for goods leads to low capital utilization and low investment.

During a recession, an investment may not respond positively to lower interest rates since low demand for goods leads to low capital utilization and low investment.

When the economy of a country declines considerably for a period of six months, economists think that is living a recession.  Some indicators confirm that the economy is in a recession. There are drops on income, in the gross domestic product, manufacturing, employment, and retail sales. These are indicatives economists take into consideration to apply the term recession. Typically, a recession lasts from 9, 10 months to 18 months.

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