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:

Inventory

The stock of any item or resource used in an organization, including raw materials, components, and finished products.

Uncertainty

A situation in which the outcomes or conditions are unknown or unpredictable.

Agile Company Scope

The extent to which a company is flexible, responsive, and adaptable to changes in the market or operational environment, enhancing competitiveness and innovation.

Intercompany Scope

The range of activities or transactions that occur between different divisions or entities within a larger corporate group.