Choose the Correct Statement

question 96

Multiple Choice

Choose the correct statement.

• A)Contractionary fiscal policy can eliminate inflationary pressure.
• B)Eliminating an inflationary gap is very simple - calculate the size of the gap and the size of the multiplier, then change government expenditure for an immediate decrease in real GDP.
• C)When an economy is in an above full-employment equilibrium, an equal decrease in government expenditure and autonomous taxes cannot return the economy to full employment.
• D)When an economy is in an above full-employment equilibrium, an increase in taxes will decrease aggregate demand, but because the autonomous tax multiplier is smaller than the government expenditure multiplier, the economy will not return to potential GDP.
• E)All of the above

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Definitions:

Life Course

The sequence of significant events, experiences, and transitions in an individual's lifetime, shaping their personal development and identity.

Distinct Stages

Specific, identifiable phases that an entity or process goes through, marked by changes or milestones that signify progression.

Sociologists

Sociologists are social scientists who study human societies, their interactions, and the processes that preserve and change them.

Rites of Passage

Ceremonial events marking an important stage in someone's life, especially birth, puberty, marriage, and death.