How Did the Housing Boom of 1997-2006 Increase Aggregate Demand

question 17

Multiple Choice

How did the housing boom of 1997-2006 increase aggregate demand?

• A) It created more jobs and increased wages in the construction sector.
• B) Interest rates increased to keep pace with housing demand.
• C) More consumers saved, so they could afford the higher housing prices.
• D) Each of these answers is correct.

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Definitions:

Statistical Analysis

The process of collecting, reviewing, and interpreting data to discover patterns and significance in the collected information.

Positive Reinforcement

A concept in behavioral psychology where the introduction of a desirable or pleasant stimulus after a behavior increases the likelihood of that behavior occurring in the future.

Negative Reinforcement

A behavior modification technique where the removal of an undesirable or unpleasant stimulus strengthens a desired behavior.

Operant Conditioning

A learning process in behavioral psychology where the strength of a behavior is modified by reinforcement or punishment.