A notable macroeconomic effect of the bursting U.S. housing bubble in 2007 was a
A. dramatic contraction of aggregate consumption spending.
B. marked expansion in the construction sector of the economy.
C. modest reduction in Real GDP growth of one percentage point.
D. all of the options are correct.
Answer: C
You might also like to view...
The flaw of the Real Business Cycle model is that it
A) assumes away output fluctuations. B) assumes complete wage rigidity. C) assumes unrealistic fooling of workers. D) requires procyclical wage movements and continuous labor market equilibrium.
Many government programs, such as unemployment compensation, operate on a deficit during recessions and a surplus during periods of economic expansion. The programs are referred to as
A) discretionary fiscal policy. B) automatic stabilizers. C) Ricardian equivalence. D) Recognition time lag.