During Which of the Following Situations Would You Advise for Expansionary

question 49

Multiple Choice

During which of the following situations would you advise for expansionary fiscal policy?

• A) when current output is above full employment output
• B) when the economy is expanding at a rapid pace
• C) when inflation is at 10% per year
• D) when the current unemployment rate is below the natural rate of unemployment
• E) when the current unemployment rate is above the natural rate of unemployment

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Definitions:

Equity Risk

The risk of loss arising from fluctuations in the values of equity investments.

Operating Activities

Business actions that relate to the company's day-to-day functions, contributing to the generation of revenue.

Debt-Equity Ratio

A metric that shows the balance between the amount of equity provided by shareholders and the debt incurred to support a company's operations, commonly utilized to evaluate its financial leverage.

Break-Even Level

The point at which total costs and total revenue are equal, resulting in no net loss or gain from business activities.