Compared to an Economy's Self-Correcting Mechanism, Active Contractionary Fiscal Policy

question 127

Multiple Choice

Compared to an economy's self-correcting mechanism, active contractionary fiscal policy will

• A)work more slowly and calmly.
• B)work more quickly.
• C)have less deflationary effects.
• D)have a smaller effect on real GDP.

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Definitions:

Running Away

the act of quickly leaving or escaping a situation, typically to avoid a negative outcome, danger, or to pursue safety.

Becoming Frightened

The process or reaction of experiencing fear in response to a perceived threat or danger.

Sensation Seeker

A person with a natural tendency to seek out thrilling, adventurous, and often risky experiences to achieve a high level of stimulation.

Pancreas

Endocrine gland; controls the levels of sugar in the blood.