Suppose There Is a Fiscal Expansion in the Current Period

question 64

Multiple Choice

Suppose there is a fiscal expansion in the current period.This fiscal expansion will tend to cause a smaller increase in current output when

• A)an increase in current output causes an increase in expected future output.
• B)an increase in the current interest rate causes expectations of expansionary monetary policy in the future.
• C)an increase in the current interest rate causes an increase in expected future interest rates.
• D)both A and B
• E) all of the above

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Definitions:

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Channels of Communication

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Comparable Salaries

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Local Competitors

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