In the Keynesian-Cross Model, Fiscal Policy Has a Multiplied Effect

question 18

Multiple Choice

In the Keynesian-cross model, fiscal policy has a multiplied effect on income because fiscal policy:

• A)increases the amount of money in the economy.
• B)changes income, which changes consumption, which further changes income.
• C)is government spending and, therefore, more powerful than private
• D)spending. changes the interest rate.

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Definitions:

Indigestible Seed Coats

The outer layers of seeds that cannot be broken down by the digestive system of certain animals, aiding in the dispersion of seeds.

Drupe

A simple, fleshy fruit in which the inner wall of the fruit is a hard stone (e.g., peach, cherry).

Berry

A simple, fleshy fruit in which the fruit wall is soft throughout (e.g., tomato, banana, grape).

Intramuscular Administration

The injection of a medication directly into a muscle, allowing the drug to be absorbed into the bloodstream quickly.