To Eliminate an Inflationary Gap Using Fiscal Policy, the Government

question 21

Multiple Choice

To eliminate an inflationary gap using fiscal policy, the government could

• A) increase government expenditure on goods and services and simultaneously increase taxes by an equal amount.
• B) only decrease taxes.
• C) increase government expenditure on goods and services and simultaneously decrease taxes by an equal amount.
• D) increase taxes.
• E) decrease the quantity of money.

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Definitions:

Cecum

A pouch connected to the junction of the small and large intestines which plays a role in absorbing fluids and salts that remain after intestinal digestion.

Large Intestine

The final section of the digestive system, responsible for water absorption and forming solid waste from undigested food.

Beneficial Bacteria

Beneficial bacteria are microbes that perform vital roles in ecosystems, including digestion, nutrient cycling, and protecting against harmful organisms.

Hydrochloric Acid

A strong, corrosive acid primarily used in digestion within the stomach to break down proteins and other food components.