Government Actions That Were Taken in Order to Stimulate the Economy

question 9

Multiple Choice

Government actions that were taken in order to stimulate the economy during the Great Recession of 2007-09 included the following, except

• A) a significant reduction of interest rates to nearly zero.
• B) a large increase in transfer payments.
• C) an increase in the deficit spending of the government.
• D) a sharp increase in the natural rate of unemployment.

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Definitions:

Cost Function

A mathematical description of how production costs vary with changes in the quantity of output produced.

Competitive Market

A market structure characterized by many buyers and sellers, where no single entity has the market power to influence prices significantly.

Tubs

Large, wide, open containers used for various purposes, including bathing and washing.

Marginal Cost Curve

A graphical representation that shows how the cost of producing one additional unit of a good varies with the quantity produced.