In the 20072009 recession, the value of common stocks in real terms fell almost 50%. How might

Question:

In the 2007–2009 recession, the value of common stocks in real terms fell almost 50%. How might this decline in the stock market have affected aggregate demand and thus contributed to the severity of this recession? Be specific about the mechanisms through which the stock market decline affected the economy.

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...

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