If an Inflationary Boom Exists, the Appropriate Fiscal Policy Is

question 93

Multiple Choice

If an inflationary boom exists, the appropriate fiscal policy is to:

• A) increase the budget deficit.
• B) increase government spending and hold taxes constant.
• C) decrease government spending and/or raise taxes.
• D) hold government spending constant and decrease taxes.

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Definitions:

Defense Mechanisms

Psychological strategies used unconsciously to protect oneself from anxiety arising from unacceptable thoughts or feelings.

Collective Unconscious

A term by Carl Jung referring to the part of the unconscious mind which is derived from ancestral memory and experience and is common to all humankind.

Displacement

Moving a troubling impulse onto a different, less threatening object.

Sparring

A form of training common in many combat sports where participants fight each other without intending to cause significant harm.