The effect of the financial crisis of 2008-2009 on the real economy in the United States was a(n) _____ in aggregate demand, a(n) _____ in output, and a(n) _________ in the unemployment rate.
A) increase; increase; increase
B) decrease; decrease; decrease
C) decrease; increase; increase
D) decrease; decrease; increase

Question

Quizplus · Accepted Answer

The financial crisis led to a decrease in aggregate demand as people and businesses became more cautious with their spending and investments. This decrease in demand then led to a decrease in output as businesses produced fewer goods and services. Finally, the decrease in output led to an increase in the unemployment rate as businesses laid off workers in response to the drop in demand.

The Effect of the Financial Crisis of 2008-2009 on the Real