Why Was the Formation of the North Atlantic Treaty Organization

question 81

Multiple Choice

Why was the formation of the North Atlantic Treaty Organization (NATO) significant to American foreign policy?

• A) The commitment to NATO as a mutual defense alliance against the Soviet Union marked an end to isolationism in the United States.
• B) In keeping with the decision of the United States not to join the League of Nations, the formation of NATO indicated the return of isolationism in the United States.
• C) The creation of NATO demonstrated that the United States was unwilling to go to war on behalf of its allies but factored its allies into economic decisions.
• D) The establishment of NATO represented a partnership with the Soviet Union that acted as a stabilizing force despite the underlying tensions of the cold war.
• E) NATO was deeply unpopular among the American people at the time of its formation and eroded popular support for the federal government in general.

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Definitions:

Multiplier Effect

An economic phenomenon where an increase in spending produces an increase in national income and consumption greater than the initial amount spent.

Aggregate Demand

The aggregate market demand for goods and services in an economic environment, valued at a specific price level within a certain timeframe.

MPC

Marginal Propensity to Consume, which is the proportion of any additional income that a consumer spends on goods and services.

Multiplier

An economic factor that quantifies the additional effects of a change in spending on the total economic activity.