- In the Figure Above, to Use Fiscal Policy to Move

question 17

Multiple Choice

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In the figure above, to use fiscal policy to move the economy back to potential GDP, the government must increase government expenditure by _{--------------------}$1 trillion and/or decrease taxes by _{--------------------}$1 trillion.

• A)recessionary; less than; more than
• B)recessionary; exactly; exactly
• C)recessionary; more than; more than
• D)inflationary; less than; less than
• E)recessionary; less than; less than

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Definitions:

Surveys

Research methods involving the collection of data from a sample of individuals through their responses to questions.

Realistic Settings

Environments or situations that closely mimic or represent real-life conditions or experiences.

Naturalistic Observation

An observational study technique where individuals are examined within their natural settings, devoid of any interference from the investigator.

Cause-and-effect

A relationship in which one event (the cause) makes another event happen (the effect).