Use the following to answer questions :
Figure 16-1
-What type of event could move the economy from E to D in Figure 16-1?
A)Inefficient dictator takes over government.
B)Nuclear war.
C)New income taxes on A.
D)A and B
E)None of the above.

Question

Use the following to answer questions :
Figure 16-1 
-What type of event could move the economy from E to D in Figure 16-1?
A)Inefficient dictator takes over government. 
B)Nuclear war. 
C)New income taxes on A. 
D)A and B 
E)None of the above.

Quizplus · Accepted Answer

Both inefficient dictator taking over government and nuclear war are extreme events that could result in a significant decrease in economic activity, moving the economy from E to D. New income taxes on A could have an impact on the economy but it may not necessarily lead to such a significant shift in the economic activity as compared to the other two events mentioned. Therefore, the best choice is D.

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