Which of the Following Statements Is True Regarding Expansionary Fiscal

question 42

Multiple Choice

Which of the following statements is true regarding expansionary fiscal policy?

• A) It leads to an increase in the supply of bonds by the Treasury.
• B) It leads to a fall in interest rates.
• C) It leads to an increase in net exports.
• D) It tends to reduce to size of government.

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Definitions:

Budget Constraint

The limitations on the household's or entity's ability to purchase goods and services, based on their income and prices.

Good X

A placeholder term often used in economics to represent a generic good or product in theoretical models.

Good Y

An alternative characterization of a product or commodity that satisfies consumer needs or desires, often used in comparative analyses.

Budget Constraint

The limitations on household expenditures, based on the combination of income, prices, and available goods or services.