Suppose the Economy Experiences a Recessionary Gap

question 119

Multiple Choice

Suppose the economy experiences a recessionary gap. Policymakers who believe that
Government is too big would favor which of the following policies to close the gap?

• A) decreases in transfer payment
• B) decreases in income tax rates
• C) increases in government purchases
• D) increases in interest rates

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Definitions:

Confining Pressure

A type of pressure applied equally in all directions on a body of rock, often affecting its physical state.

Tension

the force that pulls geological materials apart, often causing stretching and thinning.

Shear

The force or stress that causes materials or layers to slide past one another, often leading to deformation or structural failure.

Confining Pressure

The pressure exerted uniformly on a rock body from all directions, which can affect the rock's physical properties and behavior.