An Expansionary Fiscal Policy That Takes the Form of an Increase

question 36

Multiple Choice

An expansionary fiscal policy that takes the form of an increase in government purchases carries the possibility that private investment _ and, as a result, the future growth rate of .

• A)is crowded out; potential output is reduced
• B)increases; aggregate demand increases
• C)is crowded out; corporate tax revenue is reduced
• D)rises to an unsustainable level; real GDP is reduced
• E)increases; net exports increases

---

Definitions:

Implicit Attitudes

Unconscious beliefs or feelings towards objects, people, or situations that can influence behavior and perceptions.

Accessible

Easily reached or obtained; easy to understand or appreciate.

Automatically

Occurring involuntarily or without conscious thought, as in actions or processes in the human body or computers.

Conformity

The act of matching attitudes, beliefs, and behaviors to group norms, policies, or societal expectations.