A Notable Macroeconomic Effect of the Bursting U

question 46

Multiple Choice

A notable macroeconomic effect of the bursting U.S. housing bubble in 2007 was a

• A)modest reduction in Real GDP growth of one percentage point.
• B)marked expansion in the construction sector of the economy.
• C)dramatic contraction of aggregate consumption spending.
• D)all of the options are correct.

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Definitions:

Nominal Output

The total value of goods and services produced by an economy, measured in current prices without adjusting for inflation.

Interest Rate

The cost of borrowing money, typically expressed as a percentage of the amount borrowed.

Discretionary Fiscal Policy

Government strategy that includes altering its expenditure and taxation levels to oversee and impact a country's economic conditions.

Government Securities

Government securities are financial instruments issued by the government to finance its expenditures, offering investors a return in the form of interest payments.