The recession of 2001 appears to have been mostly the result of decreased
A) aggregate demand due to decreases in the money supply.
B) aggregate demand due to falling stock prices and increased uncertainty.
C) aggregate supply due to early retirements.
D) aggregate supply due to changes in labor laws and decreased availability of natural resources.

Question

Quizplus · Accepted Answer

The recession of 2001 was largely caused by a decrease in aggregate demand, which was triggered by falling stock prices and increased uncertainty. This led to decreased consumer and business spending and a slowdown in economic activity. While changes in labor laws and the availability of natural resources may have had some impact on aggregate supply, they were not significant factors in causing the recession. Early retirements may have also had some impact on aggregate supply, but this was not a major contributor to the recession.

The Recession of 2001 Appears to Have Been Mostly the Result