"Expansionary Fiscal Policy Is Needed to Increase Real GDP ---

question 11

Multiple Choice

"Expansionary fiscal policy is needed to increase Real GDP --- at least in the short run." The economist who said this most likely believes that

• A) the tax multiplier is larger than the government spending multiplier.
• B) the AS curve is vertical.
• C) there will be a great deal of crowding out connected with a rise in government spending.
• D) the AS curve is upward-sloping.
• E) c and d

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Definitions:

Collateral

Assets pledged by a borrower to secure a loan or credit, which the lender can seize if the borrower defaults.

Defaults

Situations in which parties fail to fulfill their obligations under a contract or agreement.

Recording Mortgage

The process of registering a mortgage deed with the appropriate government office to make it a part of the public record, ensuring legal protection and establishing priority.

Mortgagee

The party who lends money and takes back a mortgage as security for the loan.