If Real GDP Exceeded Potential Real GDP and Inflation Was

question 281

Multiple Choice

If real GDP exceeded potential real GDP and inflation was increasing, which of the following would be an appropriate fiscal policy?

• A)a decrease in the money supply and an increase in the interest rate
• B)an increase in government spending
• C)an increase in taxes
• D)an increase in oil prices
• E)an increase in transfers

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Definitions:

Insulin Production

The process by which the pancreas creates insulin, a hormone crucial for regulating blood sugar levels.

Regulators

Mechanisms, processes, or entities that control, adjust, or manage other systems or behaviors.

Extrinsic Motivation

Motivation driven by external rewards such as money, fame, grades, and praise rather than internal factors.

Intrinsic Motivation

A drive to perform actions or pursue goals for their own sake and personal rewards.