If the Effects of Expansionary Fiscal Policy Hit When the Economy

question 62

Multiple Choice

If the effects of expansionary fiscal policy hit when the economy is already expanding,

• A) the effects could lead to even deeper recession.
• B) the policy will have no effect.
• C) the policy is called an automatic stabilizer.
• D) it may lead to excessive aggregate demand and inflation.
• E) it will lead to high rates of unemployment along with high rates of inflation,known as stagflation.

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