Which of the Following About Fiscal Policy Is True

question 34

Multiple Choice

Which of the following about fiscal policy is true?

• A)The expansionary fiscal policy of the 1980s stimulated aggregate demand and led to high rates of inflation during the latter half of the decade.
• B)The restrictive fiscal policy of the 1990s led to sluggish economic growth during the decade.
• C)Even though fiscal policy was highly expansionary during the 1980s, the inflation rate fell and remained at relatively low levels.
• D)Even though fiscal policy was restrictive during the 1990s, the real growth rate of the economy was strong.
• E)Both c and d are true.

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