When USHousing Prices Declined Prior to and During the Great Recession,it

question 60

Multiple Choice

When U.S.housing prices declined prior to and during the Great Recession,it caused aggregate demand to decrease because

• A) the government raised interest rates to prevent inflation.
• B) household wealth decreased,causing a decline in consumer spending.
• C) the U.S.population and labor force declined abruptly.
• D) the government refused to allow the money supply to increase.
• E) the government raised taxes and decreased spending.

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Definitions:

Manufacturing Costs

The direct and indirect expenses incurred in producing goods, including materials, labor, and overhead costs.

Purchasing Power

The purchasing power of a currency, defined by the quantity of goods or services a single monetary unit can acquire.

Consumer Prices

The prices of goods and services purchased by households.

Minimum Wage

The lowest legal hourly pay rate that an employer can pay an employee.