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CFA Level 1 Question of the Week - Economics
In 2007, housing prices dropped almost overnight as a result of what some economists referred to as a correction from prices that formed in a market bubble. Financial assets also dropped in value. The subsequent changes in GDP could be best explained as:
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CFA Level 1 Question of the Week - Economics 10 votes
A. a movement along the aggregate demand (AD) curve to a lower price level and less output.
B. a shift in the aggregate supply (AS) curve, such that supply decreased at all price levels.
C. a leftward shift in the aggregate demand (AD) curve as a consequence of reduced wealth.