Which of the Following Was Most Indicative of Europe's Reduced

question 2

Multiple Choice

Which of the following was most indicative of Europe's reduced economic might in the wake of the war?

• A) Europe's inability to field a navy
• B) Europe's greater reliance on income from its colonies
• C) Europe's reversed financial relationship to the U.S.
• D) Europe's inability,over the long term,to overcome serious inflation
• E) Europe's greater investment in foreign markets

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Definitions:

Price Level

A measure of the average prices of goods and services in an economy, indicating the purchasing power of money and the cost of living.

Aggregate Demand-Aggregate Supply Diagram

A graphical representation used in macroeconomics to illustrate the relationship between total demand and total supply in an economy.

Full Employment

An economic situation in which all available labor resources are being used in the most efficient way possible, essentially meaning that unemployment is at the lowest possible level without causing inflation.

Aggregate Supply Curve

A graphical representation that shows the total amount of goods and services that producers in an economy are willing and able to supply at different price levels over a period.