Why Do Classical Economists Believe That Expansionary Fiscal Policy Has

question 86

Multiple Choice

Why do classical economists believe that expansionary fiscal policy has little impact?

• A) Time lags offset the impact of the policy.
• B) Crowding out offsets the impact of the policy.
• C) Fiscal policy has a multiplied impact.
• D) Budget deficits are needed to stimulate the economy.

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Definitions:

Utah

A state in the western United States known for its vast landscapes, national parks, and the Great Salt Lake.

Kansas

A U.S. state located in the Midwestern part of the country, known for its agricultural outputs, like wheat and corn, and as the setting of the famous novel "The Wizard of Oz."

Primary Succession

Primary succession is an ecological process of community development that occurs in an environment previously uninhabited by living organisms, starting from bare rock or barren soil.

Lava

The molten rock expelled by a volcano during an eruption, which solidifies as it cools to form igneous rock.