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:

Reflected Appraisals

The process by which individuals form perceptions of themselves based on how they believe others view them.

Self-Schema

Cognitive structures derived from past experiences that guide how individuals perceive, interpret, and respond to information about themselves.

Collectivist Cultures

Cultures that emphasize group over individual. The focus is on the interconnectedness of individuals, particularly the interdependent nature of their social relationships and identities.

Individualist Cultures

Cultures that emphasize the individual and value individual achievement.