13. Tim Geithner, a former U.S. Treasury secretary, has said, "The recession
that began in late 2007 was extraordinarily severe. But the actions we took at
its height to stimulate the economy helped arrest the free fall, preventing
an even deeper collapse and putting the economy on the road to recovery."
Which two of the three principles of economy-wide interaction are at work
in this statement?
14. A sharp downturn in the U.S. housing market in August 2007 reduced the
income of many who worked in the home construction industry. One news
source reported that wire-transfer businesses were likely to suffer because
many construction workers are foreign nationals who regularly send part of
their wages back to relatives in their home countries via wire transfers.
With this information, use one of the principles of economy-wide
interaction to trace the train of events that explains how reduced spending
for U.S. home purchases is likely to affect the performance of the
economies in the home countries of these workers.
