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The Reason a Shock to One Sector Can Spread to the Whole

Question 33

Multiple Choice

The reason a shock to one sector can spread to the whole economy is that


A) a decrease in production in one sector leads to an overall decrease in spending
B) firms will need to help bail out other firms that are having troubles
C) an increase in production in one sector will lead to an overall decrease in spending
D) most shocks are not sector-specific but economy-wide
E) workers laid off in the one sector will purchase more goods in another sector

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