Which of the Following May NOT Serve as a Possible

question 18

Multiple Choice

Which of the following may NOT serve as a possible chain reaction for either fiscal or monetary policy?

• A)G↑ ⇒ Y↑ ⇒ C↑ ⇒ Y↑ ⇒ C↑....
• B)T↓ ⇒ Y↑ ⇒ C↑ ⇒ Y↑ ⇒ C↑....
• C)M↑ ⇒ i↓ ⇒ I↓ ⇒ Y↓ ⇒ C↓....
• D)M↑ ⇒ i↓ ⇒ I↑ ⇒ Y↑ ⇒ C↑....
• E)M↓ ⇒ i↑ ⇒ I↓ ⇒ Y↓ ⇒ C↓....

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Definitions:

Rate of Return

The gain or loss on an investment over a specific period, expressed as a percentage of the investment's cost.

Interest-Rate Cost

The expense incurred by borrowing funds, typically expressed as a percentage of the total amount borrowed.

Marginal Utilities

The supplementary pleasure or value a consumer secures by acquiring one more unit of a product or service.

Total Utility

The total satisfaction or benefit that a consumer receives from consuming a given quantity of goods or services.