The housing shock that occurred during the Great Recession reduced wealth and residential construction,causing the
A) IS curve to shift to the right.
B) IS curve to shift to the left.
C) MP curve to shift up.
D) MP curve to shift down.

Question

Quizplus · Accepted Answer

The housing shock that occurred during the Great Recession reduced wealth and residential construction, which caused a decrease in consumer spending and investment. This shift in aggregate demand caused the IS curve to shift to the left.

The Housing Shock That Occurred During the Great Recession Reduced