The Increases in a Nation's Output and Consumption That Result

question 80

Multiple Choice

The increases in a nation's output and consumption that result from specialization and trade are called

• A)the terms of trade.
• B)the gains from trade.
• C)autarky.
• D)comparative advantage.
• E)absolute advantage.

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Definitions:

Marginal Propensity To Consume

The ratio of the change in consumption spending to the change in disposable income, indicating how much of additional income will be spent.

John Maynard Keynes

A UK-based economist who significantly transformed both the theoretical and practical aspects of macroeconomics, as well as the economic strategies executed by governments.

Great Depression

A severe worldwide economic depression that took place mostly during the 1930s, beginning in the United States following the stock market crash of 1929.

Automatic Stabilizers

Economic policies and programs, such as unemployment insurance and taxation, that automatically adjust to counteract economic fluctuations without the need for explicit government intervention.