The Recession of 2007-2009 Happened in Part Because, After the Housing

question 31

Multiple Choice

The recession of 2007-2009 happened in part because, after the housing bubble burst in 2006, the ensuing financial crisis:

• A)made it difficult for government to finance deficit spending.
• B)led to widespread inflation.
• C)increased the level of uncertainty about the future.
• D)shifted the PAE line upward.

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Definitions:

Labor Supply Data

Information and statistics regarding the availability of workers and their willingness to work at various wage levels.

Marginal Product

The additional output resulting from using one more unit of a particular input, assuming all other inputs remain constant.

Monopsony

A market structure in which there is only a single buyer of a good, service, or resource.

Labor Supply Curve

A graphical representation showing the relationship between the wage rate and the quantity of labor that workers are willing to supply.