What Role Did the Federal Government Take in Supporting Americans

question 35

Multiple Choice

What role did the federal government take in supporting Americans who wanted to travel by car to vacation and see other parts of the country?

• A) It funded money to states to build a new national highway system.
• B) It dropped the price of gasoline to new lows so that people could travel more freely.
• C) It provided low interest loans so that people could purchase more automobiles.
• D) It offered the Ford Motor Company lucrative incentives to drop the price of automobiles.

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Definitions:

Consumer Surplus

The distinction between what consumers are willing and able to allocate financially for a good or service, and what they actually allocate.

Purely Competitive Market

A purely competitive market is characterized by many buyers and sellers, homogenous products, and no barriers to entry or exit, leading to price taking behavior by individuals.

Equilibrium

A state of balance where demand and supply in a market are equal, leading to a stable price.

Creative Destruction

A concept in economics that refers to the process by which new innovations trigger the demise of older technologies and economic structures, leading to economic evolution.