In the Keynesian Model,the Difference Between Using Monetary and Fiscal

question 59

Multiple Choice

In the Keynesian model,the difference between using monetary and fiscal policy to eliminate a recession is that

• A)monetary policy will eliminate a recession quicker than fiscal policy will.
• B)fiscal policy will eliminate a recession quicker than monetary policy will.
• C)an expansionary monetary policy will leave the economy with a lower real interest rate than an expansionary fiscal policy.
• D)an expansionary fiscal policy will leave the economy with a lower real interest rate than an expansionary monetary policy.

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Definitions:

Conditioning

A learning process in which an individual's behavior becomes dependent on the occurrence of a stimulus in its environment, often used to explain behaviorist psychological theories.

Reconditioning

A process of unlearning negative behaviors and reactions and replacing them with positive ones through various therapeutic techniques.

Conditioned Stimulus

A previously neutral stimulus that, after being associated with an unconditioned stimulus, elicits a conditioned response.

Unconditioned Stimulus

A stimulus that naturally and automatically triggers a response without prior conditioning.