One explanation for the length of the Great Recession is that there was a leftward shift in the long-run aggregate supply curve,caused by
A) instability in the housing market.
B) new financial regulations.
C) decreased consumer confidence.
D) sticky prices.
E) decay of key infrastructure.

Question

Quizplus · Accepted Answer

New financial regulations increased the cost of borrowing for banks, which in turn reduced the amount of money they were willing to lend to businesses and consumers. This led to a decrease in aggregate supply, which contributed to the length of the Great Recession.

One Explanation for the Length of the Great Recession Is