One Advantage of Using Expansionary Fiscal Policy Rather Than Relying

question 8

Multiple Choice

One advantage of using expansionary fiscal policy rather than relying on automatic adjustment to recover from a recessionary gap is that

• A)the economy will overshoot potential GDP and a boom will be underway.
• B)inflation will not be as stimulated.
• C)price level will rise higher than otherwise.
• D)the recovery may be more rapid.
• E)the recovery will be slower,thereby causing less disruption.

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Definitions:

Fromm's Needs

A concept developed by Erich Fromm, emphasizing societal and individual needs that drive personality development, such as relatedness, transcendence, rootedness, sense of identity, and frame of orientation.

Maslow's Needs

Refers to Maslow's hierarchy of needs, a motivational theory in psychology comprising a five-tier model of human needs, from basic (physiological) to advanced (self-actualization).

Holistic-Dynamic Theory

A theory suggesting individuals are unified beings who should be understood in terms of their dynamic relationships within a whole context, often emphasizing the importance of motivation and personal growth.

Maslow's Needs

A hierarchy of human needs proposed by Abraham Maslow, progressing from basic physical needs to complex psychological growth demands.