An Active Stabilization Policy Designed to Limit the Size of Government

question 51

Multiple Choice

An active stabilization policy designed to limit the size of government would

• A)raise G to eliminate a recessionary gap and lower taxes to eliminate an inflationary gap.
• B)raise G to eliminate a recessionary gap and raise taxes to eliminate an inflationary gap.
• C)reduce taxes to eliminate a recessionary gap and raise G to eliminate an inflationary gap.
• D)reduce taxes to eliminate a recessionary gap and reduce G to eliminate an inflationary gap.

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Definitions:

Interact

To act in such a way as to have an effect on another; to act reciprocally or influence each other.

Egocentric Predicament

The problem that seems to follow from the view that we know only our own minds directly—that is, that we might never know anything or anyone else.

Selfish Beings

Pertains to individuals primarily concerned with their own interests and benefits, often at the expense of others.

External World

The reality existing outside an individual's mind, perceived through the senses.