Both the Crowding-Out Effect and New Classical Model Indicate That

question 28

Multiple Choice

Both the crowding-out effect and new classical model indicate that

• A) expansionary fiscal policy is a highly effective weapon with which to fight an economic downturn.
• B) restrictive fiscal policy is a highly effective weapon with which to control inflation caused by excess demand.
• C) there are side effects of budget deficits that will substantially, if not entirely, offset their expansionary impact on aggregate demand.
• D) fiscal policy can be used effectively to restrain inflation but it is largely ineffective as a weapon against recession.

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Definitions:

Expert Power

The influence one can exert over others due to special skills, knowledge, or expertise in a particular area.

Influence Tactics

Strategies or approaches used to persuade or direct others' behavior in order to achieve one's objectives.

Referent Power

A form of influence based on the ability to attract others and build loyalty through charisma, likability, or status.

Influence Tactics

Strategies or methods used by individuals to change the perception, opinion, or behavior of others to achieve a desired outcome.