During the Great Recession,the U.S.aggregate demand curve shifted to the left,in part,because
A) the stock market declined in value by one-third.
B) there was a decline in the U.S.population.
C) there was an increase in expected income.
D) the U.S.government restricted trade with other countries.
E) there was an increase in housing prices.

Question

Quizplus · Accepted Answer

The decline in the stock market by one-third was a major factor that contributed to the leftward shift of the U.S. aggregate demand curve during the Great Recession. This caused a decrease in consumer and business confidence, resulting in lower spending and investment, leading to a decline in aggregate demand.