Question

At the end of World War II many European countries were rebuilding and so were eager to buy capital goods and had rising incomes. We would expect that the rebuilding increased aggregate demand in

Answer 1

We would expect that the rebuilding at the end of World War II in many European countries increased aggregate demand for capital goods in a. Both the US and Europe.

What is aggregate demand?

Aggregate demand refers to the total demand for goods and services within an economy.

Because of the Marshall Plan initiated by the United States for rebuilding Europe after the Second World War, aggregate demand increased in both the United States and Europe.

Answer Options:

a. Both the US and Europe

b. The US, but not Europe

c. Europe, but not the US

d. Neither the US nor Europe

Thus, the rebuilding at the end of World War II in many European countries increased aggregate demand for capital goods in a. Both the US and Europe.

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