The stock market just crashed; the Dow Jones Industrial Average fell by 750 points. You would expect the effect on aggregate consumption to be the largest if which of the following facts was true?
(a) The crash had been preceded by a large run-up in the price of stocks.
(b) Most stocks were owned by insurance companies.
(c) Most stocks were owned by pension funds that invested in the market.
(d) Many individuals had invested in the stock market immediately prior to the crash.
Answer: D
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