Figure 10-9 ​

question 24

Multiple Choice

Figure 10-9
​
-One of the justifications of government stabilization policy is that it may

• A)increase the fluctuations in inflation and employment.
• B)increase the multiplier effect of changes in autonomous spending.
• C)increase the volatility of economic variables.
• D)reduce the severity of inflation and unemployment.

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Definitions:

Soviet Sphere

refers to the geopolitical influence zone dominated by the Soviet Union during the Cold War, including countries in Eastern Europe, Asia, and elsewhere that were allies or under the control of the USSR.

Eastern Europe

The eastern part of the European continent, which comprises countries that were historically influenced by the Byzantine or Ottoman Empires, and/or were part of the Soviet bloc.

Bretton Woods Conference

A meeting held in 1944 where allied nations agreed on a series of financial and monetary arrangements, leading to the establishment of the International Monetary Fund and the World Bank.

Postwar Capitalist

Refers to the economic system and practices in place in the period following a major war, often characterized by rapid industrial growth and development.