The Reason That Fiscal Policy Is Ineffective During a Recession

question 9

Multiple Choice

The reason that fiscal policy is ineffective during a recession is that

• A)an expansionary fiscal policy will lead to higher interest rates,appreciation of exchange rate,and a reduction in net exports.
• B)an expansionary fiscal policy will lead to lower interest rates,depreciation of exchange rate,and an increase in net exports.
• C)an expansionary fiscal policy will lead to lower interest rates,appreciation of exchange rate,and a reduction in net exports.
• D)an expansionary fiscal policy will lead to higher interest rates,appreciation of exchange rate,and an increase in net exports.

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Definitions:

Information Processing Approach

A cognitive psychology theory that likens human thinking to the operation of a computer, focusing on how information is received, processed, stored, and retrieved.

Code-Based Approaches

Methods or strategies focused on the understanding and application of codes or rules, often used in programming and cryptography.

Information Processing

The way the human mind interprets, stores, and retrieves information; often compared to the operations of a computer.