Suppose the Economy Is at a Point Below Its Physical

question 81

Multiple Choice

Suppose the economy is at a point below its physical production possibilities frontier but above its institutional production possibilities frontier.In response to this situation,Keynesian economists may propose that government enact __________ fiscal policy to correct this __________ gap by __________ government expenditures.

• A) expansionary; inflationary; increasing
• B) contractionary; inflationary; decreasing
• C) expansionary; recessionary; increasing
• D) contractionary; recessionary; decreasing
• E) contractionary; inflationary; increasing

---

Definitions:

McClelland's Acquired Needs Theory

A motivational theory suggesting that individuals are driven by three primary needs: achievement, affiliation, and power, which are acquired over time.

Maslow's Love/Belongingness

A concept from Maslow's hierarchy of needs that emphasizes the human need for interpersonal relationships, feeling loved, and belonging to a group.

ERG Theory

A theory on human motivation that categorizes needs into three groups: Existence, Relatedness, and Growth.

Existence Needs

Refers to the basic physiological and safety needs of individuals, such as food, water, shelter, and security.