Contractionary Fiscal Policy During a Recession Affects a Country's Budget

question 84

Multiple Choice

Contractionary fiscal policy during a recession affects a country's budget balance by moving the budget:

• A) toward a balance of zero.
• B) toward a bigger deficit or a bigger surplus.
• C) into a bigger deficit or smaller surplus.
• D) into a bigger surplus or a smaller deficit.

---

Definitions:

Heuristics

Simple, efficient rules or strategies, often used to facilitate quick decision-making or problem-solving.

System 1

Refers to the fast, instinctive, and emotional way of thinking proposed in Daniel Kahneman's dual-process theory of the mind.

System 2

System 2 is a concept from cognitive psychology that describes the deliberative, analytical, and conscious way of thinking, as opposed to the fast, automatic, intuitive thinking of System 1.

Package Sizes

The dimensions or volume of the container or packaging material used to encase products for distribution, sale, or storage.