Fiscal Policy Becomes More Powerful in Changing the Level of Output

question 2

Multiple Choice

Fiscal policy becomes more powerful in changing the level of output as

• A)investment becomes more interest elastic
• B)money demand becomes more interest inelastic
• C)money demand becomes more income elastic
• D)the marginal propensity to save gets smaller
• E)the marginal propensity to consume gets smaller

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Definitions:

Monopolistic Model

A market structure characterized by a single seller dominating the market, lacking competition, and influencing price and supply of goods or services.

Bureaucracy

A system of government in which most of the decisions are made by state officials rather than by elected representatives.

Hierarchy of Authority

The arrangement or classification of individuals within an organization based on power, status, and responsibilities, creating a structure of superior and subordinate relationships.

Implementation Decisions

The actions and strategies put into place to execute policies, plans, or programs.