Many Economists Would Argue That, If the Government Is to Run

question 18

Multiple Choice

Many economists would argue that, if the government is to run an expansionary fiscal policy, spending should focus on:

• A) consumption goods.
• B) imports.
• C) infrastructure.
• D) competition.

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Definitions:

Income

Sum of money regularly obtained through one's job or investment decisions.

Expenses

Outflows or other using up of assets or incurrence of liabilities during a period from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity’s ongoing major operations.

Quasilinear Preferences

A type of preference where utility is linear in one argument, allowing indifference curves to have the same slope regardless of the level of consumption of other goods.

Equivalent Variation

A measure used in economics to evaluate the change in wealth that would leave an individual's utility unchanged before and after a policy change or a price change.