Stock prices in Richland declined suddenly after one of the largest banks in Richland faced bankruptcy. If animal spirits play an important role in shaping Richland's economy, which of the following is likely to happen assuming all else equal?

A) Equilibrium unemployment in Richland will fall.
B) Equilibrium wage levels in Richland will fall.
C) Investment by firms in Richland will increase.
D) Richland's consumption expenditure will increase.


B

Economics

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