Expansionary Fiscal Policy Occurs When the ________ to Stimulate the Economy

question 122

Multiple Choice

Expansionary fiscal policy occurs when the ________ to stimulate the economy toward expansion.

• A) government decreases spending or increases taxes
• B) government decreases spending or decreases taxes
• C) government increases spending or increases taxes
• D) government increases spending or decreases taxes
• E) Federal Reserve increases money supply

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Definitions:

Current Dollars

A term referring to the value of money not adjusted for inflation, representing the nominal value of economic transactions based on current prices.

GDP

Gross Domestic Product, a measure of the economic performance of a country, calculated as the total value of all goods and services produced.

Real GDP

Gross Domestic Product adjusted for inflation, which represents the value of all goods and services produced within a country's borders in a given period, measured in constant prices.

GDP

Gross Domestic Product, the total value of all goods and services produced by a country over a specific time period.