If Real GDP Is Less Than Potential GDP, Which of the Following

question 104

Multiple Choice

If real GDP is less than potential GDP, which of the following fiscal policies would increase real GDP?

• A)An increase in government expenditure and/or a decrease in taxes
• B)Only a decrease in government expenditure
• C)A decrease in government expenditure and/or an increase in taxes
• D)Only an increase in taxes

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Definitions:

Barkcloth Weaving

A traditional craft of making cloth from the inner bark of certain trees, practiced in various cultures around the world for clothing, ceremonial uses, and art.

Polynesian Group

A collection of more than 1,000 islands scattered over the central and southern Pacific Ocean, whose inhabitants share linguistic, cultural, and genetic ties.

Pre-European Contact

Referring to the period and cultures in the Americas or other regions before significant influence, exploration, or colonization by European powers.

Oceania

A geographic region comprising the islands of the tropical Pacific Ocean, including Melanesia, Micronesia, Polynesia, and Australasia.