Use the Following to Answer Questions

question 79

Multiple Choice

Use the following to answer questions .
Exhibit: Fiscal Policy 1
-(Exhibit: Fiscal Policy 1) In this situation, if policymakers want to close the output gap with fiscal policies that will stimulate aggregate demand, what should they do?

• A) establish a consumption tax to encourage savings
• B) increase government spending
• C) loosen environmental regulations to lower businesses cost of production
• D) raise interest rates

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Definitions:

Freudian Theory

A set of psychoanalytic theories developed by Sigmund Freud that center on unconscious desires, childhood experiences, and the structure of the psyche.

Catharsis

A release of tension or anxiety.

Delivered Shocks

In psychological experiments, a method used to assess obedience or aggression where participants are instructed to administer electric shocks to others.

Subjected To Frustration

The state of experiencing obstacles that prevent an individual from achieving desired goals, leading to feelings of dissatisfaction or stress.