The Decrease in Short-Run Aggregate Supply During the Great Recession

question 139

Multiple Choice

The decrease in short-run aggregate supply during the Great Recession was caused by:

• A) excessive consumer debt.
• B) miscalculation of the risk of subprime mortgages.
• C) the worldwide glut of savings.
• D) businesses reducing their production capacity by closing plants and laying off workers.

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Definitions:

Arbitration

A method of dispute resolution where a neutral third party, called an arbitrator, makes a binding decision after considering the evidence and arguments.

Dispute Resolution

The process of resolving a dispute or conflict between parties, which can include negotiation, mediation, arbitration, or litigation.

Jurisdiction

The legal authority given to a court or other body to make decisions and judgments over certain matters or geographical areas.

Diversity of Citizenship

A principle used in U.S. federal courts concerning parties from different states or a foreign country, impacting jurisdiction.