Both the Crowding-Out Effect and New Classical Model Indicate That

question 28

Multiple Choice

Both the crowding-out effect and new classical model indicate that

• A) expansionary fiscal policy is a highly effective weapon with which to fight an economic downturn.
• B) restrictive fiscal policy is a highly effective weapon with which to control inflation caused by excess demand.
• C) there are side effects of budget deficits that will substantially, if not entirely, offset their expansionary impact on aggregate demand.
• D) fiscal policy can be used effectively to restrain inflation but it is largely ineffective as a weapon against recession.

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Definitions:

Sexual

Pertaining to the biological differences between males and females and activities related to physical attraction or intimate physical contact.

Pleasure-Giving Urge

Denotes an intrinsic motivation or desire to seek activities or stimuli that provide enjoyment, satisfaction, or pleasure.

Defence Mechanisms

Psychological strategies brought into play by individuals, groups, and even nations to cope with realities and to maintain self-image.

Sublimation

A defense mechanism in psychoanalytic theory where socially unacceptable impulses are transformed into socially acceptable actions or behaviors.