The Growth Rate of Potential Output Might Be Decreased by an Expansionary

question 22

Multiple Choice

The growth rate of potential output might be decreased by an expansionary fiscal policy if

• A)the budget deficits are persistent.
• B)the simple multiplier is small.
• C)the policy crowds out private investment.
• D)public investment has high productivity.
• E)the composition of output is not altered.

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Definitions:

Corpus Callosum

The broad ribbon of nerve fibers that links the two hemispheres of the brain and facilitates communication between them.

Neurons

Neurons are the basic working units of the brain, specialized cells that transmit information to other nerve cells, muscle, or gland cells.

Association Areas

Regions of the brain involved in integrating information from different sensory inputs and are crucial for complex mental functions.

Master Stem Cells

Undifferentiated cells capable of giving rise to indefinitely more cells of the same type, and from which certain other kinds of cell arise by differentiation.