Suppose There Is a Simultaneous Fiscal Expansion and Monetary Expansion

question 44

Multiple Choice

Suppose there is a simultaneous fiscal expansion and monetary expansion.We know with certainty that

• A)output will increase.
• B)output will decrease.
• C)the interest rate will increase.
• D)the interest rate will decrease.
• E) both output and the interest rate will increase.

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Definitions:

Operating Income

The income generated from the primary activities of a business, determined by deducting operating costs from the gross profit.

Selling Price

The amount a buyer pays to purchase a product or service from a seller.

Variable Cost

A cost that varies with the level of output or production, such as materials and labor directly involved in manufacturing.

Fixed Costs

Expenses that do not change with the level of goods or services produced by a business, such as rent or a salaried employee's wages.