Why, After a Period of Relative Stability, Was the American

question 48

Multiple Choice

Why, after a period of relative stability, was the American economy plagued by inflation from late 1776 into the 1780s?

• A) As people's faith in the government declined, their faith in the worth of the nation's currency also declined.
• B) As the amount of currency in circulation declined, unsold goods piled up in warehouses.
• C) As the economy grew and Americans' incomes increased, the production of goods lagged behind demand.
• D) As high taxes cut into the profits of producers, they cut back production and caused a shortage of goods.

---

Definitions:

Proximity

Nearness in space, time, or relationship.

Similarity

The state of being alike or sharing common features, used in various contexts to describe resemblance or equivalence between entities.

Closure

The psychological need to seek resolution and a sense of completeness or finality in our perceptions and relationships.

Reversible Figures

Images or objects that can be perceived in more than one way, where the perspective shifts with each view.