The collapse of a financial bubble in 2008 is best regarded as a:
A) negative shock to aggregate demand.
B) positive shock to aggregate demand.
C) negative shock to long-run aggregate supply.
D) positive shock to long-run aggregate supply.

Question

Quizplus · Accepted Answer

The collapse of a financial bubble in 2008 resulted in a decrease in consumer and investor confidence, which led to a decrease in spending and investment, ultimately leading to a decrease in aggregate demand.

The Collapse of a Financial Bubble in 2008 Is Best