Which of the Following Is an Appropriate Discretionary Fiscal Policy

question 241

Multiple Choice

Which of the following is an appropriate discretionary fiscal policy if equilibrium real GDP falls below potential real GDP?

• A)an increase in government purchases
• B)an increase in the supply of money
• C)an increase in individual income taxes
• D)a decrease in transfer payments

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Definitions:

Road Construction

The building and maintenance of roads, including planning, designing, and managing the construction process to ensure efficient transportation.

Habituation

A psychological learning process wherein there is a decrease in response to a stimulus after repeated exposures, signifying an adaptation or getting used to the stimulus.

Sensitization

An increased reaction to a stimulus following repeated exposures to it.

Classical Conditioning

An educational method where a connection is made between a stimulus in the environment and one that occurs naturally, resulting in a conditioned response.