Which of the Following Best Summarizes the Main Causes of the Great

question 77

Multiple Choice

Which of the following best summarizes the main causes of the Great Recession?

• A) Oil-producing countries deliberately raised the price of petroleum,leading to inflation and a deep recession.
• B) The Federal Reserve raised short-term interest rates very high in an effort to decrease inflation,which also drove the economy into a recession.
• C) The end of overseas war efforts led to a deep decrease in federal spending,which reduced employment and caused a recession.
• D) The stock market collapsed following the end of a bubble in technology stock prices,which caused a decrease in investment spending and a recession.
• E) The collapse of housing prices led to decreased wealth and significant problems in financial markets,as well as a decrease in expected income and a stock market collapse.

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Definitions:

Scarcity

A fundamental economic problem of having seemingly limitless human wants in a world of limited resources, which leads to the necessity of making choices on how to allocate resources efficiently.

Rewarded

Pertains to receiving a benefit or compensation in return for an action or service.

George Homans

An American sociologist known for his work in developing social exchange theory, explaining social behavior in terms of costs, benefits, and expectations of rewards.

Success

The achievement of a goal or objective, often recognized through the attainment of fame, wealth, or social status.