The Decline in the Price Level Following the 1929 Stock

Multiple Choice

The decline in the price level following the 1929 stock market crash may have reduced household spending on durable goods and houses because the decline

A) resulted in higher nominal interest rates.
B) led the government to increase its spending, which crowded out spending by households.
C) increased the real value of outstanding household debt.
D) led to an offsetting decline in nominal wages.