When Stock Prices Declined During the Great Depression,it Caused Aggregate

question 90

Multiple Choice

When stock prices declined during the Great Depression,it caused aggregate demand to decrease because

• A) households became more optimistic and increased consumer spending.
• B) household wealth decreased,leading to a decline in consumer spending.
• C) firms' net worth decreased,leading to an increase in investment spending.
• D) the government reduced taxes and increased spending.
• E) the government increased the money supply.

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Definitions:

Hedge Ratio

A ratio used to determine the portion of an asset or portfolio that is protected or hedged against market movements.

Dollar Change

The absolute difference in the value of a financial instrument, currency or commodity's price from one period to another.

Dividend-Payout Policies

Strategies a company uses to decide the portion of profits it will distribute to shareholders as dividends versus retaining for reinvestment.

Dividend Yield

A financial ratio that shows how much a company pays out in dividends each year relative to its stock price.