The Decrease in Short-Run Aggregate Supply During the Great Recession

question 53

Multiple Choice

The decrease in short-run aggregate supply during the Great Recession was caused by

• A) excessive consumer debt.
• B) miscalculation of the risk of subprime mortgages.
• C) the worldwide glut of savings.
• D) businesses that reduced their production capacity by closing plants and laying off workers.

---

Definitions:

Implied Warranty

A legal assumption that goods or services sold meet certain quality standards, even if not explicitly stated in a contract.

Latent Defects

Hidden problems or flaws in a property that are not discoverable by reasonable inspection before purchase.

Remote Control Devices

Electronic devices used to operate another device from a distance, typically using radio frequency or infrared signals.

Fixtures

Items that are attached to a property in such a way that they become part of the property and are considered legally part of the real estate.