If Fiscal Policy Were Able to Exert a Significant Impact

question 169

Multiple Choice

If fiscal policy were able to exert a significant impact on the economy during the Great Depression, we would expect

• A) an increase in government expenditures and a reduction in budget deficits.
• B) an increase in government expenditures and an increase in budget deficits.
• C) a decrease in government expenditures and a reduction in budget deficits.
• D) a decrease in government expenditures and an increase in budget deficits.

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Definitions:

Solute

Substance that is dissolved in a solvent, forming a solution.

Solvent

Liquid portion of a solution that serves to dissolve a solute.

Solution

Fluid (the solvent) that contains a dissolved solid (the solute).

Tonicity

The ability of a surrounding solution to cause a cell to gain or lose water, depending on the concentration of solutes.