Which of the Following Explains Why Congress or the President

question 131

Multiple Choice

Which of the following explains why Congress or the president might hesitate to use restrictive fiscal policy in an election year?

• A)Monetary policy is always more effective.
• B)Voters might become unemployed.
• C)Fiscal policy is too complex.
• D)Fiscal year appropriations are not under the authority of Congress.

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Definitions:

Real Wages

The purchasing power of wages, adjusted for inflation, reflecting the actual goods and services that money earned as wages can buy.

Labor Shortages

A situation in which employers have difficulty filling positions with qualified candidates, often due to a lack of available or skilled workers.

Short-Run Aggregate Supply

The aggregate volume of products and services that companies intend to sell within a brief period in the economy, based on existing price levels.

Long-Run Aggregate Supply

Represents the total production of goods and services in an economy at full employment, without any market frictions.