Contractionary Fiscal Policy Would Be Most Effective in Decreasing Inflation

question 206

Multiple Choice

Contractionary fiscal policy would be most effective in decreasing inflation when

• A)the marginal propensity to consume is low.
• B)investment spending is insensitive to interest rates.
• C)the economy has a high marginal tax rate.
• D)investment spending is sensitive to interest rates.

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Definitions:

Self-Identity

The perception or recognition of one's characteristics, values, and beliefs that define who they are as an individual.

Essential Self

The characteristics that make a person that particular person.

David Hume

An 18th-century Scottish philosopher, historian, economist, and essayist known for his philosophical empiricism and skepticism, as well as his contribution to the naturalist approach to philosophical questions.

Descartes

A French philosopher, mathematician, and scientist, known for his contributions to the development of modern philosophy and the Cartesian coordinate system.