If the Stock Market Crashes, What Would Be the Effect

question 91

Multiple Choice

If the stock market crashes, what would be the effect on aggregate demand and how could the Bank of Canada offset those effects?

• A) aggregate demand increases; by increasing the money supply
• B) aggregate demand increases; by decreasing the money supply
• C) aggregate demand decreases; by increasing the money supply
• D) aggregate demand decreases; by decreasing the money supply

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Definitions:

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

Personal Representative

is an individual appointed to manage the estate of a deceased person, including distributing assets to beneficiaries.

Intestate Succession

The process by which the property of a deceased person is distributed by law to heirs when that person dies without a valid will.

Heirs

Individuals legally entitled to receive property from a deceased person's estate under state intestacy laws when there is no valid will.