The Widespread Problems in Financial Markets During the Great Recession

question 47

Multiple Choice

The widespread problems in financial markets during the Great Recession negatively affected key institutions in the macroeconomy.In addition,the financial regulations that were put in place restricted banks' ability to lend at levels equal to those in effect prior to 2008.This resulted in:

• A) a shift leftward of the aggregate demand curve.
• B) a shift leftward of the long-run aggregate supply curve.
• C) a shift rightward of the long-run aggregate supply curve.
• D) a shift rightward of the aggregate demand curve.
• E) a shift rightward of the short-run aggregate supply curve.

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Definitions:

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue, indicating the company's profit.

Sales Revenue

The total amount of money generated from selling goods or services to customers.

Direct Labour Costs

The total expenses associated with paying workers who directly manufacture a product or perform a service.

Prime Costs

These are the direct costs of manufacturing a product, including direct materials and direct labor.