Mainstream Macroeconomics Would Suggest That Fiscal Policy

question 202

Multiple Choice

Mainstream macroeconomics would suggest that fiscal policy

• A)affects GDP and the price level through changes in aggregate supply.
• B)changes aggregate demand and GDP through the multiplier process.
• C)has no effect unless the fiscal policy is accompanied by changes in the money supply.
• D)is relatively ineffective because the outcomes are anticipated and offset.

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Definitions:

Legal Capacity

This term refers to a person's ability to enter into binding contracts and have them enforced by law, typically governed by factors such as age and mental state.

Binding Contract

refers to an agreement between parties that is legally enforceable and includes obligations that each party must fulfill.

Emancipated

The legal status attained by a minor, usually through a court order, that grants them the rights and responsibilities of adulthood before reaching the age of majority.

Minor Gets Married

A special legal circumstance where individuals under the age of majority are allowed to enter into marriage, often requiring parental consent or judicial approval.