If a Stock Market Bubble Bursts

question 68

Multiple Choice

If a stock market bubble bursts:

• A) aggregate demand in the economy decreases.
• B) aggregate demand in the economy increases.
• C) aggregate supply in the economy decreases.
• D) aggregate supply and demand in the economy decrease.

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Definitions:

Experimental Methods

A research methodology in psychology and other sciences involving the manipulation of variables to determine cause and effect relationships.

Biases

Systematic patterns of deviation from norm or rationality in judgment, whereby inferences about other people and situations may be drawn in an illogical fashion.

Logical Errors

Faulty reasoning patterns or mistaken beliefs that often result from cognitive biases or limitations.

Conclusions

Statements or judgments that are arrived at by reasoning from evidence or facts.