Which of the Following Statements Concerning the Japanese Earthquake in 2011

question 132

Multiple Choice

Which of the following statements concerning the Japanese earthquake in 2011 is true?

• A)Paul Krugman's predictions about the long-term effects of the earthquake were not correct.
• B)There is no short-term but only long-term effect on the Japanese economy.
• C)The loss of labor and capital resulting from the earthquake was large relative to the size of the Japanese economy.
• D)The theory of economic fluctuations predicts that the initial direct effects of the earthquake can have feedback effects on the entire Japanese economy.
• E)The theory of economic growth predicts that the earthquake will definitely have no impact on the long-term growth of the Japanese economy.

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Definitions:

Marginal Propensity

The ratio of the change in consumption to the change in income, indicating how much consumption will change with a change in income.

Real GDP

The measure of a country's economic output adjusted for price changes, providing a more accurate reflection of an economy's size and growth.

Inventory Adjustments

Changes made to the recorded amount of inventory to account for discrepancies, damages, losses, or theft.

Aggregate Expenditure Line

A graphical representation in macroeconomics that shows the total spending on goods and services in an economy at various levels of income.