When the stock market crashed in 2008, the so-called reverse wealth effect caused consumer spending to decrease.

Question

Quizplus · Accepted Answer

The reverse wealth effect refers to the decrease in consumer spending when people feel poorer due to a decline in the value of their assets, such as stocks and real estate. This effect was observed during the 2008 stock market crash, when many investors saw their portfolios lose value and subsequently reduced their spending.

When the Stock Market Crashed in 2008, the So-Called Reverse