Fiscal Policy Is More Effective in Affecting Economic Activity If

question 132

Multiple Choice

Fiscal policy is more effective in affecting economic activity if:

• A) many resources are unemployed.
• B) there is a real shock instead of an aggregate demand shock.
• C) the economy returns to its long-run potential growth rate almost immediately.
• D) there is a long implementation lag.

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Definitions:

Regurgitating

The act of repeating information without understanding or analysis.

Rewinding

Refers to the process of winding back or reversing something, such as a videotape or audio cassette, to a previous point.

Contentious

Contentious involves being prone to arguments, disputes, or conflict, often marked by heated disagreements.

Empowerment

The process of increasing the capacity of individuals or groups to make choices and transform those choices into desired actions and outcomes.