The Stimulus Package That the Government Implemented During the Great

question 78

Multiple Choice

The stimulus package that the government implemented during the Great Recession of 2007-09 did not have as strong an impact on GDP and unemployment as expected, for the following reasons, except:

• A) Very high debt levels of households
• B) Consumers raised their saving rates
• C) The stimulus package caused prices to fall in many sectors
• D) The effects of the stimulus package were diffuse and spread thinly among many sectors

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Definitions:

Machines

Mechanical or electronic devices designed to perform specific tasks, often used to enhance efficiency and productivity in manufacturing or processing.

Total Cost

The complete expenditure incurred for producing or offering a product or service, including fixed and variable costs.

Competitive Factor Markets

Refers to markets where factors of production (such as labor, capital) are bought and sold in a competitive environment, ensuring prices are influenced by supply and demand.

Production Function

An equation that describes the relationship between inputs (like labor and capital) and the maximum output that can be produced with those inputs.