When the housing bubble popped in 2007, combined demand and supply side shocks:
A) decreased output.
B) increased investment.
C) decreased unemployment.
D) increased interest rates.

Question

Quizplus · Accepted Answer

The housing bubble popping led to a decrease in both demand and supply for housing, which in turn led to a decrease in output. This was due to the fact that many people were no longer able to afford mortgages or purchase homes, and construction of new homes slowed down.

When the Housing Bubble Popped in 2007, Combined Demand and Supply