If a stock market bubble bursts:
A)aggregate demand in the economy decreases.(True Answer )Correct
B)aggregate demand in the economy increases.
C)aggregate supply in the economy decreases.
D)aggregate supply and demand in the economy decrease.

Question

Quizplus · Accepted Answer

If a stock market bubble bursts, it leads to a decrease in household wealth, which reduces consumer confidence and spending, leading to a decrease in aggregate demand in the economy. This can lead to a recession or economic downturn.

If a Stock Market Bubble Bursts