According to some economists, what contributed to the unusual uncertainty that adversely affected aggregate supply during the recovery following the recession of 2007-2009?

Question

What will be an ideal response?

Answer 1

Given that the financial crisis and recession of 2007-2009 were more severe than any since World War II, an increased level of uncertainty was unavoidable. But in 2010, additional sources of uncertainty might have caused some firms to produce less output and hire fewer workers than they would have otherwise. Owners of some small and medium-sized businesses were concerned that the Affordable Care act increased the cost of hiring workers. In mid-to-late 2010, there was also concern that Congress might allow tax reductions passed during 2001 and 2003 to expire. Finally, many small to medium-sized businesses found that they were unable to secure bank loans to expand their businesses.