This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Most recessions in the United States since World War II have begun with A) a decline in ... (Read 56 times)

yoooooman

  • Hero Member
  • *****
  • Posts: 557
on: Jun 29, 2018
Most recessions in the United States since World War II have begun with
 
  A) a decline in residential construction. B) a rapid increase in the price level.
  C) a stock market crash. D) a substantial number of bank failures.

Question 2

Explain how a stock market crash has the potential to lead to a recession in an economy.
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

flexer1n1

  • Sr. Member
  • ****
  • Posts: 373
Reply #1 on: Jun 29, 2018
Answer to Question 1

A

Answer to Question 2

A stock market crash is essentially a substantial decrease in the average price of stocks. Stocks are a part of real wealth. A stock market crash decreases the value of stocks which decreases real wealth. Real wealth is an important determinant of consumption spending. If real wealth declines, so does consumption spending. Therefore, a stock market crash will result in a decline in consumer expenditures. This will result in a decline in GDP. If the decrease in GDP is substantial enough, this can lead to a recession.


yoooooman

  • Member
  • Posts: 557
Reply 2 on: Jun 29, 2018
Excellent

amynguyen1221

  • Member
  • Posts: 355
Reply 3 on: Yesterday
Gracias!

« previous next »
 

Did you know?

The most common treatment options for addiction include psychotherapy, support groups, and individual counseling.

Did you know?

All adverse reactions are commonly charted in red ink in the patient's record and usually are noted on the front of the chart. Failure to follow correct documentation procedures may result in malpractice lawsuits.

Did you know?

Although the Roman numeral for the number 4 has always been taught to have been "IV," according to historians, the ancient Romans probably used "IIII" most of the time. This is partially backed up by the fact that early grandfather clocks displayed IIII for the number 4 instead of IV. Early clockmakers apparently thought that the IIII balanced out the VIII (used for the number 8) on the clock face and that it just looked better.

Did you know?

The most destructive flu epidemic of all times in recorded history occurred in 1918, with approximately 20 million deaths worldwide.

Did you know?

Many medications that are used to treat infertility are injected subcutaneously. This is easy to do using the anterior abdomen as the site of injection but avoiding the area directly around the belly button.

For millions of people, the United States represents a land of opportunity and freedom from ... For millions of people, the United States represents a land of opportunity and freedom from ...
Importance of intermediate states Importance of intermediate states
Prevalence of Food Insecurity in the United States Prevalence of Food Insecurity in the United States
Daily Calorie Intake from Sugar Drinks, United States, 2005–2008 Daily Calorie Intake from Sugar Drinks, United States, 2005–2008
Animated The one-way flow of energy and cycling of materials in the world of life Animated The one-way flow of energy and cycling of materials in the world of life
Age structure for the United States Age structure for the United States
Video: What is Cholesterols? Introduction to Lipoproteins

For a complete list of videos, visit our video library