What Are the Recessions of the 1970s Often Most Attributed

question 97

Multiple Choice

What are the recessions of the 1970s often most attributed to?

• A)declining inflation expectations
• B)an increase in oil prices
• C)declines in the price of stock
• D)decreases in the money supply

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Definitions:

Marginal Propensity

The portion of additional income that an individual is likely to spend on goods and services instead of saving.

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy, which can affect purchasing power and inflation.

Aggregate Expenditure Line

A graphical representation of the total spending in an economy, including consumption, investment, government, and net exports, at various levels of income.

Marginal Propensity

The proportion of an additional increment of income that is spent on consumption. It reflects the change in consumption resulting from a change in income.