Asked by Tristan Jansen on May 31, 2024
Verified
After the housing bubble burst,consumer confidence plummeted and housing sales dropped to all-time lows.This caused the demand curve for normal goods to shift
A) inwards
B) outwards
C) stay constant
D) none of the above
Consumer Confidence
A measure of the overall consumer optimism about the state of an economy, reflected through spending and saving behaviors.
Housing Bubble
A temporary condition characterized by an unusual increase in housing prices fueled by demand, speculation, and exuberant spending to the levels that income levels do not support.
Demand Curve
A graph showing the relationship between the price of a good and the quantity demanded by consumers, usually downward sloping to the right indicating inverse relationship between price and quantity demanded.
- Acquire knowledge on how multiple factors, such as income, prices of complementary and substitute goods, and external influences like health benefits, shape the demand and supply curves.
Verified Answer
ER
Emily RinglerJun 06, 2024
Final Answer :
A
Explanation :
With the decrease in consumer confidence and housing sales, there would be a reduction in demand for normal goods. This would lead to a shift in the demand curve inwards towards the origin, indicating a decrease in quantity demanded at every price level.
Learning Objectives
- Acquire knowledge on how multiple factors, such as income, prices of complementary and substitute goods, and external influences like health benefits, shape the demand and supply curves.