(Last Word) in Response to the Great Recession, the Federal

question 68

Multiple Choice

(Last Word) In response to the Great Recession, the federal government engaged in significant deficit-funded spending. While it kept the recession from getting worse, and did result in some
Positive economic growth, it did not fully achieve the desired result. Which of the following best
Explains why the fiscal policy actions fell short of their objective?

• A) Despite the fiscal stimulus, aggregate demand continued to shift to the right.
• B) The fiscal stimulus caused a significant leftward shift of aggregate supply.
• C) Offsetting monetary policy caused the aggregate demand to remain virtually unchanged, meaning that all gains in output came from aggregate supply shifts.
• D) The fiscal stimulus shifted aggregate demand to the right, but not enough to restore full employment.

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Definitions:

Test Statistic F

The ratio of two variances that follows an F-distribution, used in statistical methods like ANOVA to determine the significance of group differences.

Degrees of Freedom

The number of independent values or quantities that can be assigned to a statistical distribution without violating any constraints.

Dependent Variable

A variable in an experiment or model that is expected to change as a result of manipulations or changes in the independent variable(s).

Independent Variables

Variables that are manipulated or categorized to determine their effect on other variables.