(Consider This) The 2007-2009 recession began with reductions in investment and consumption spending, precipitated by a ﬁnancial crisis. This explanation for the recession is consistent with
A) the monetarist view of macroeconomic instability.
B) the rational expectations view of macroeconomic instability.
C) the mainstream view of macroeconomic instability.
D) none of these views of macroeconomic instability.

Question

Quizplus · Accepted Answer

The explanation given in the statement is consistent with the mainstream view of macroeconomic instability, which emphasizes the role of factors such as the availability of credit and market confidence in driving fluctuations in investment and consumption. The monetarist and rational expectations views may also offer additional insights, but are not explicitly mentioned in the statement as being consistent with the given explanation.

(Consider This) the 2007-2009 Recession Began with Reductions in Investment