How did the housing boom of 1997-2006 increase aggregate demand?
A) It created more jobs and increased wages in the construction sector.
B) Interest rates increased to keep pace with housing demand.
C) More consumers saved, so they could afford the higher housing prices.
D) Higher interest rates created a boom in the banking sector.

Question

Quizplus · Accepted Answer

The housing boom led to an increase in demand for construction services, creating more jobs and higher wages in the construction sector. This increased income for workers led to higher consumer spending and an overall increase in aggregate demand.

How Did the Housing Boom of 1997-2006 Increase Aggregate Demand