The Recession in Real GDP in 1970 During the Nixon

question 23

Multiple Choice

The recession in real GDP in 1970 during the Nixon administration

• A) did not accord with the Keynesian theory because the price level had risen sharply; in the Keynesian model, prices fell when real GDP and employment were falling.
• B) reinforced the Keynesian theory that prices fell when real GDP and employment were falling.
• C) did not accord with the Keynesian theory because expansionary fiscal policies resulted in deflation; in the Keynesian model, prices rose when expansionary fiscal policies were administered to eliminate a recessionary gap.
• D) reinforced the Keynesian theory that fiscal policies were more effective than monetary policies in reducing output gaps.

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Definitions:

Active Voice

A sentence construction where the subject performs the action expressed by the verb, making the writing clear and direct.

Passive Voice

A grammatical construction where the subject of the sentence is the recipient of the action rather than the doer.

Topic Sentence

A sentence that expresses the main idea of the paragraph in which it occurs.

Deductive Paragraph

A paragraph that begins with a general statement or hypothesis and then presents specific evidence to support it.