(Consider This) in the Mainstream View, the Severe Recession of 2007-2009

question 248

Multiple Choice

(Consider This) In the mainstream view, the severe recession of 2007-2009 was caused by

• A) an aggregate-supply shock, which caused the AS curve to shift left.
• B) a financial crisis that caused a shrinkage in investment and consumption spending, thereby reducing aggregate demand.
• C) monetary factors, specifically the excessive expansion of money supply brought about by the Federal Reserve, starting in the recession of 2001.
• D) a huge and sudden drop in the velocity of money, causing a significant reduction in both nominal and real GDP.

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Definitions:

Generalization

The tendency to apply learned behavior to similar situations, beyond the original conditions of learning.

Discrimination

The unjust or prejudicial treatment of different categories of people, especially on the grounds of race, age, or gender.

Biofeedback Training

A technique that teaches individuals to improve their health by controlling certain bodily processes that normally happen involuntarily.

Counterconditioning

Counterconditioning is a therapy technique used to replace negative or harmful responses to a stimulus with positive ones.