The New Classical Model Implies That a Shift to a More

question 77

Multiple Choice

The new classical model implies that a shift to a more expansionary fiscal policy (the substitution of debt financing for taxes) will

• A) stimulate aggregate demand and employment.
• B) retard aggregate demand and employment.
• C) increase the real rate of interest.
• D) exert little or no impact on the real interest rate, aggregate demand, and employment.

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Definitions:

Structural Equation Modelling

A statistical technique that examines complex relationships among variables by testing theoretical models.

Outcome Variables

Variables that represent the result of the operation of one or more factors on a specific condition, often used in experimental and observational research.

Theoretical Model

A conceptual framework that outlines the presumed relationships between variables and is used to guide research and practice in various fields.

Nominal Group Technique

A structured form of group meeting that seeks to achieve a consensus of expert opinion on a particular topic.