When 9,000 Banks Failed During the Great Depression,it Caused Aggregate

question 38

Multiple Choice

When 9,000 banks failed during the Great Depression,it caused aggregate demand to decrease because

• A) consumers responded by decreasing their rate of savings and increasing spending.
• B) the government didn't help the banks,causing the money supply to decrease.
• C) expected income increased,causing an increase in investment.
• D) it led to very high rates of inflation,which eroded household spending.
• E) it caused a rapid decline in exports to other countries.

Recognize the impact of job characteristics on pay rates.

Grasp the importance of worker productivity on earnings.

Understand the role of worker preferences and discrimination in earning differentials.

Analyze the relationship between investment in human and physical capital and economic growth.

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Definitions:

Grace Period

A set period of time after the due date during which payment can be made without penalty.

M2

A money aggregate consisting of M1 plus savings deposits, small-denomination time deposits, money market mutual funds, and other miscellaneous near-monies.

Near-Monies

Assets that are easily convertible into cash but are not cash themselves, such as savings accounts and time deposits.

Time Deposits

Deposits that earn a fixed interest rate if held for the specified period, which can range from several months to several years; also called certificates of deposit.