Question: Classify each shock as either a financial shock or a spending shock. Financial Shock Spending Shock Answer Bank A booming stock market increases consumer wealth.

Classify each shock as either a financial shock or a spending shock. Financial Shock Spending Shock Answer Bank A booming stock market increases consumer wealth. The U.S. dollar becomes cheaper relative to foreign currencies. The Federal Reserve decides to lower the federal funds rate.. Pessimistic expectations lead to lower consumer confidence. Lower corporate taxes lead entrepreneurs to invest more in their businesses

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