Which One of the Following Factors Contributed to the Decline

question 80

Multiple Choice

Which one of the following factors contributed to the decline in real output during the Great Depression?

• A) Deflation, which changed the terms of long-term contracts and discouraged long-term exchange.
• B) Inflation, which reduced the value of the dollar and eroded the savings of the elderly.
• C) Stable monetary policy, which caused business decision makers to lose confidence in the Fed's ability to fine-tune the economy.
• D) Establishment of the Federal Deposit Insurance Corporation.

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Definitions:

Labor Hours

The total number of hours worked by employees within a specific period.

Isoquant

A curve that represents all combinations of inputs that produce the same level of output, used in production theory to analyze input substitution.

Marginal Product

The additional output generated by adding one more unit of a specific input, while keeping other inputs constant.

Capital

Resources, such as funds or assets, used by businesses and individuals to create wealth through investment or production.