Fiscal Policy Is Neutral in the Long Run Because

question 74

Multiple Choice

Fiscal policy is neutral in the long run because

• A) the stimulus translates into contractionary monetary policy that dampens investment and negates the policy.
• B) the expansion of GDP causes interest rates to climb and thereby lowers investment and cancels the stimulus.
• C) increases in government spending always cause higher deficits, public outrage at the debt, and subsequent higher taxes or program rollbacks that cancel the initial stimulus.
• D) the political business cycle is manipulated to try to produce recovery from recession during election years.
• E) none of the above.

---

Definitions:

Full-time Work

Employment that typically requires a minimum number of hours per week, often considered to be around 40 hours in many countries.

Clear Cultural Connections

The explicit and understandable links made between learning content and the cultural contexts or backgrounds of students.

Superficial Multicultural Programs

Programs that aim to promote cultural awareness and diversity but only address these issues on a surface level without fostering deep understanding or change.

Self-efficacy

refers to an individual's belief in their own ability to successfully accomplish a task or deal with challenges.