During the Great Recession,___________ caused aggregate demand to decrease.

Question

Quizplus · Accepted Answer

The rapid decline in housing prices caused many homeowners to have negative equity, meaning they owed more on their mortgages than their homes were worth. This led to a decrease in consumer spending as homeowners felt less financially secure and were less able to make large purchases. This decrease in consumer spending contributed to the overall decrease in aggregate demand during the Great Recession.

During the Great Recession,___________ Caused Aggregate Demand to Decrease