Important example of aggregate demand shock

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Demand Shocks – As we’ll continue to discuss in class, a recession may reflect declines in aggregate demand, aggregate supply, or both. Are swings in consumer sentiment characteristic of recessions? Plot a measure of sentiment (FRED code: UMCSENT) and discuss its evolution during the recessions since 1980. Explain why consumer sentiment is an important example of an aggregate demand shock.

Reference no: EM131101558

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