The ________ of the late 1990s was an example of the wealth effect, while _______ of 2008 was an example of the reverse wealth effect.
A)declining stock values; skyrocketing market prices.
B)skyrocketing stock values; plunging market prices.
C)declining market prices; plunging market prices.
D)tech bust; real estate boom.

Question

Quizplus · Accepted Answer

The skyrocketing stock values in the late 1990s led to the wealth effect, where individuals felt wealthier and spent more, contributing to economic growth. On the other hand, the plunging market prices of 2008 led to the reverse wealth effect, where individuals felt poorer and reduced their spending, contributing to a decrease in economic growth.

The ________ of the Late 1990s Was an Example of the Wealth