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) Each of these answers is correct.

Question

Quizplus · Accepted Answer

The housing boom of 1997-2006 created more jobs and increased wages in the construction sector, which in turn increased aggregate demand. Interest rates did not increase to keep pace with housing demand, and it is not likely that more consumers saved as housing prices increased.

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