According to Systems Theory,high Levels of Interconnectedness Can Lead To

question 19

Multiple Choice

According to systems theory,high levels of interconnectedness can lead to:

• A)More pressure on governments to regulate the economy and increase their interventionism
• B)A spiral of economic catastrophes and business failures
• C)Greater stability in the whole system
• D)A tendency for small initial disturbances to become amplified in unpredictable ways

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Definitions:

Minimum ATC

The point at which a firm's average total cost is at its lowest, typically considered in the context of the long-run average cost curve.

Purely Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and a product that is homogeneous across suppliers.

Short Run

A period of time during which at least one input, like equipment or labor, is fixed while others can be varied to change output levels.

Automatic Market Adjustments

The self-regulating behavior of markets where prices and quantities adjust to changes in demand and supply conditions without external intervention.