Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4Refer to Figure 2.4. The economy moves from Point A to Point D. This could be explained by
A. an increase in economic growth.
B. a change in society's preferences for motorcycles versus hybrid cars.
C. a reduction in unemployment.
D. an improvement in technology.
Answer: B
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What is a "currency drain?" How and why does it affect the money multiplier?
What will be an ideal response?
Currency crises may result from
A) central bank balance sheets with higher liabilities than assets. B) political upheaval leading to lowering exports. C) a reconfiguration of central bank balance sheets. D) speculative attacks on the currency or central banks purchasing excessive amounts of government bonds. E) depreciation of foreign reserves.
Ingrid operates a business that provides optics equipment to the government. She just received a government contract for $2 million. She then hires three new employees and buys a great quantity of supplies from several vendors. Her employees and the vendors earn more money, pay more taxes, spend more money, and save more money. This is an example of ______.
a. automatic stabilization b. the Laffer curve c. the multiplier effect d. contractionary policy
Which statement is true?
A. Americans first embraced labor unions as an important institution at the same time presidents Teddy Roosevelt and William Howard Taft were breaking up some of the major trusts. B. Labor leader Samuel Gompers pushed for socialist reforms such as the 8-hour day and the elimination of the wage system. C. The National Labor Relations Act was passed the year after the Sherman Anti-trust Act of 1891. D. Labor unions were considered subversive until the 1940s.