Monetary and Fiscal Policies

question 168

Multiple Choice

Monetary and fiscal policies:

• A) can reduce the severity of economic busts.
• B) have been proven to be ineffective and are no longer used during recessions.
• C) only work during times of rapid inflation.
• D) are tools used during economic booms but not economic busts.

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Definitions:

Utility Function

A mathematical representation that captures the preference ranking of various bundles of goods by an individual, translating these preferences into a level of utility or satisfaction.

Income

Refers to the money received, typically on a regular basis, for work or through investments.

Price

The amount of money required to purchase a good or service.

Price

The amount of money required to purchase a good or service, often determined by factors like demand, supply, and market competition.