Consider All the Effects of Fiscal Policy

question 36

Multiple Choice

Consider all the effects of fiscal policy. An income tax cut

• A)increases both real GDP and the price level.
• B)increases real GDP but decreases the price level.
• C)increases real GDP but leaves the price level unchanged.
• D)increases real GDP and the price level may rise or fall.
• E)does not change real GDP or the price level.

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Definitions:

Cochlea

A spiral-shaped cavity in the inner ear that plays a key role in converting sound vibrations into neural signals.

Nociceptors

Specialized sensory receptors responsible for detecting harmful stimuli and sending pain signals to the brain.

ESP

Extrasensory Perception, a claimed ability to gain information without the use of the known five senses.

Sensory Input

The information that the brain receives from the senses, including sight, sound, smell, taste, and touch, which it uses to understand the environment.