After Reading a Newspaper Article About Yet Another Bank Collapse

question 87

Multiple Choice

After reading a newspaper article about yet another bank collapse in the United States,Bill's grandpa asserted,"It's no wonder-when the capital development of a country becomes a by-product of the activities of bookies and speculators,things are bound to fall apart." What term in the text would apply to grandpa's point of view?

• A) stockbroker capitalism
• B) mafia capitalism
• C) casino capitalism
• D) industrial capitalism

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Definitions:

Marginal Propensity

The tendency of a person to spend an additional unit of currency; often relates to income in the context of marginal propensity to consume or save.

Simple Multiplier

The ratio used to estimate the proportional amount of increase, or decrease, in final income that results from an injection, or withdrawal, of spending.

Marginal Propensity

The rate at which an individual, household, or economy is likely to consume (or save) with respect to an incremental increase in income.

Multiplier

An economic factor that quantifies the impact of increased spending in the economy, leading to a proportional increase in income and consumption.