during aggregat demand to decrease because a) household wealth decreased, leading to a decline in consumer spending. O b) households became more optimistic and increased consumer spending. Oc) the government increased the money supply. Od) firms' net worth decreased, leading to an increase in investment spending. O e) the government reduced taxes and increased spending.

Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter31: Capital Markets
Section: Chapter Questions
Problem 8E
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When stock prices declined during the Great Depression, it caused aggregate
demand to decrease because
a) household wealth decreased, leading to a decline in consumer spending.
b) households became more optimistic and increased consumer spending.
Oc) the government increased the money supply.
O d) firms' net worth decreased, leading to an increase in investment spending.
O e) the government reduced taxes and increased spending.
Transcribed Image Text:When stock prices declined during the Great Depression, it caused aggregate demand to decrease because a) household wealth decreased, leading to a decline in consumer spending. b) households became more optimistic and increased consumer spending. Oc) the government increased the money supply. O d) firms' net worth decreased, leading to an increase in investment spending. O e) the government reduced taxes and increased spending.
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