In 2008-2009, Which of the Following Weakened the Demand Stimulus

question 41

Multiple Choice

In 2008-2009, which of the following weakened the demand stimulus effects of expansionary fiscal policy?

• A) the unwillingness of the federal government to run budget deficits
• B) the heavy indebtedness of American households
• C) a high level of household spending on big-ticket items such as houses and cars, which do not promote economic growth
• D) the continuation of the high saving rates on the part of Americans

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Definitions:

Compulsions

Repetitive behaviors or mental acts that an individual feels driven to perform in response to an obsession or according to rules that must be applied rigidly.

Psychoanalysis

A set of theories and therapeutic techniques related to the study of the unconscious mind, developed by Sigmund Freud, focusing on resolving mental conflicts.

General Anesthetic

A class of medication used to induce a temporary state of loss of sensation or awareness for the purpose of performing surgery or other painful procedures.

Muscle Relaxant

A substance or drug that reduces muscle tension and is used in the treatment of muscular pain and spasms.