In the Long Run, Many Economists Argue That Fiscal Policy

question 24

Multiple Choice

In the long run, many economists argue that fiscal policy is ineffective because it has little effect on

• A)potential GDP.
• B)the inflation rate.
• C)the price level.
• D)nominal GDP.
• E)nominal interest rates.

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Definitions:

Unlimited Liability

A legal obligation where an individual's responsibility for debt extends beyond what they've invested in a business, potentially affecting personal assets.

Partners' Capital Statement

A financial report that shows the changes in each partner's equity in a partnership over a period of time.

Income Ratio

A financial metric comparing different aspects of income, such as net profit to sales, to assess profitability or performance.

Capital Deficiency

A scenario in which a company's debts surpass its possessions, suggesting a risk of not being able to meet its financial obligations.