An Expansionary Fiscal Policy That Takes the Form of an Increase

question 73

Multiple Choice

An expansionary fiscal policy that takes the form of an increase in government purchases carries the possibility that private investment ________ and,as a result,the future growth rate of ________.

• A)rises to an unsustainable level; real GDP is reduced
• B)is crowded out; corporate tax revenue is reduced
• C)increases; aggregate demand increases
• D)increases; net exports increases
• E)is crowded out; potential output is reduced

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Definitions:

Long-term Exposure

Prolonged contact or engagement with a particular substance, environment, or stimulus, which may have lasting effects on health or behavior.

Sound Waves

Sound waves are vibrations that travel through the air or another medium, which can be heard when they reach a person's or animal's ear, characterized by their frequency, wavelength, and amplitude.

Frequency

The rate at which a vibration occurs that constitutes a wave, either in a material (as in sound waves), or in an electromagnetic field (as in radio waves and light).

Pitch

Refers to the perceived frequency of a sound, determining how "high" or "low" it sounds.