Which of the Following Is One Reason for the Decline

question 82

Multiple Choice

Which of the following is one reason for the decline in aggregate demand that led to the recession of 2007-2009?

• A)falling oil prices
• B)an increase in net exports
• C)the end of the housing bubble
• D)a decline in government spending

Understand the fundamental differences between classical and Keynesian economic theories.

Comprehend the role of aggregate supply and demand in explaining economic fluctuations.

Recognize the causes and solutions for recessions and depressions according to different economic schools.

Explain the mechanisms of market self-correction as proposed by classical economists.

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Definitions:

Contraction

A period of economic decline marked by falling GDP, reduced consumer spending, and increased unemployment.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the degree to which a company can increase its profits by increasing sales.

Profits

The financial gains that remain after subtracting all expenses from revenue, indicating the financial success of a business.

Operating Leverage

A measure of how sensitive a company's operating income is to a change in its sales volume, indicating the degree to which fixed costs are used in production.