In the Early 1990s, Although the U

question 2

Multiple Choice

In the early 1990s, although the U.S. economy was in a recession, Congress rejected the idea of using an expansionary fiscal policy to close the recessionary gap. What was the reason?

• A) Policymakers believed that contractionary fiscal policies are more likely to increase employment because inflation would be lower and therefore producers could pay lower wages.
• B) Congress recognized that fiscal policy lags rendered fiscal policy ineffective.
• C) Congress was concerned that expansionary policies would increase the government budget deficit.
• D) Congress believed that the economy's self-correcting mechanism was better able to eliminate output gaps than fiscal policies.

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Definitions:

Implicit Memory

A kind of enduring memory that allows us to execute activities without the active realization of past encounters.

Declarative Memory

A type of long-term memory that involves the conscious recall of facts and events.

Procedural Memory

The type of long-term memory responsible for knowing how to perform different actions and skills, essentially the memory of how to do certain things.

Recognition

The cognitive process of identifying previously encountered information, objects, or situations.