The Result of the Reunification of Eastern and Western Germany

question 87

Multiple Choice

The result of the reunification of eastern and western Germany in 1990

• A) was a boom in Germany and higher inflation, with no effect on nearby countries.
• B) was a recession in Germany and lower inflation, with no effect on nearby countries.
• C) was a boom in Germany and higher inflation, and, with other EMS countries' commitment to fixed exchange rates, a deep recession in nearby countries.
• D) was a recession in Germany and lower inflation, and, with other EMS countries' commitment to fixed exchange rates, a deep recession in nearby countries.
• E) was a recession in Germany and lower inflation, causing a boom in nearby countries.

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Definitions:

Last Dollar

The final unit of currency spent or invested in a particular context, emphasizing its potential impact or value.

Income Elasticity

The percentage change in the quantity of a product demanded divided by the percentage change in consumer income that caused the change in quantity demanded. It measures the responsiveness of the demand for a good to a consumer’s change in income.

Perfectly Elastic

Describes a situation where the quantity demanded or supplied reacts extremely to a small change in price, indicating infinite responsiveness.

Demand Curve

A graph representing the relationship between the price of a good or service and the quantity demanded by consumers at those prices.