Which of the Following Is an Appropriate Discretionary Fiscal Policy

question 241

Multiple Choice

Which of the following is an appropriate discretionary fiscal policy if equilibrium real GDP falls below potential real GDP?

• A)an increase in government purchases
• B)an increase in the supply of money
• C)an increase in individual income taxes
• D)a decrease in transfer payments

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Definitions:

Defence Mechanism

Psychological strategies employed unconsciously to protect oneself from anxiety-arising thoughts or feelings.

Stress

A state of mental or emotional strain or tension resulting from adverse or demanding circumstances.

Rationalization

The process of providing reasonable explanations to justify behaviors or decisions that may otherwise appear irrational.

Projection

A psychological defense mechanism where individuals attribute their own undesirable thoughts, feelings, or motives to another person.