If the Economy Begins to Fall into a Recession,one Would

question 123

Multiple Choice

If the economy begins to fall into a recession,one would expect Congress and the president to conduct:

• A) expansionary fiscal policy.
• B) expansionary monetary policy.
• C) contractionary fiscal policy.
• D) contractionary monetary policy.
• E) countercyclical monetary policy.

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Definitions:

Purely Competitive Firm

A business that operates in a market with many buyers and sellers, where each has a negligible impact on price and product homogeneity prevails.

Unimpeded Entry

A situation in a market where there are no obstacles preventing new competitors from entering and competing.

MR = MC Rule

A principle in economics stating that profit maximization occurs when marginal revenue equals marginal cost.

Short Run

A period in economics where at least one input is fixed and cannot be changed.