Contractionary Fiscal Policy to Prevent Real GDP from Rising Above

question 302

Multiple Choice

Contractionary fiscal policy to prevent real GDP from rising above potential real GDP would cause the inflation rate to be ________ and real GDP to be ________.

• A)higher; higher
• B)higher; lower
• C)lower; higher
• D)lower; lower

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Definitions:

First Impression

The initial perception or judgement formed upon encountering something or someone for the first time.

Prospective Employer

An individual or organization considering hiring someone for a job position.

Smog

A type of air pollution, typically a mixture of smoke and fog, that can have harmful effects on health and the environment.

Air Pollution

The presence of harmful or excessive quantities of substances including gases, particles, and biological molecules in Earth's atmosphere which can cause disease, death to humans, damage to other living organisms such as food crops, or the natural or built environment.