What situation occurs when there is little growth in the economy and consumers reduce spending?

The situation where there is little growth in the economy and consumers reduce spending is accurately described as a slump. During a slump, economic activity slows down significantly, leading to decreased consumer confidence and spending. This can result in businesses facing lower demand for their products and services, often prompting them to cut back on investment, hiring, or production.

A slump can be seen as a period in which the economy is underperforming, often characterized by high unemployment and reduced income levels. It is important to understand that while a recession may bring about similar conditions, a slump specifically indicates a prolonged period of stagnation rather than just a decline from a previously higher growth rate. In contrast, the other choices like expansion and recovery refer to times of economic growth, while a recession marks a significant decline in economic activity, but not necessarily the same stagnation described by a slump.