Which of the Following Statements About Fiscal Policy Is True

question 169

Multiple Choice

Which of the following statements about fiscal policy is true?

• A) Real Gross Domestic Product (GDP) can be increased above its long-run equilibrium only in the short run.
• B) Real Gross Domestic Product (GDP) can never be increased above its long-run equilibrium, even for a brief period of time.
• C) Government can shift the aggregate demand curve inward by increasing spending.
• D) Government can shift the aggregate demand curve outward by reducing spending.

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Definitions:

Brain Drain

The phenomenon of skilled professionals emigrating from one country to another, often in search of better opportunities.

Cash Welfare Payments

Government-provided financial assistance to individuals or families, often aimed at reducing poverty.

Immigrants

Individuals who move from one country to another for the purpose of settling or residing there, often in search of a better life or opportunities.

Industrial Country

A nation with a significant portion of its economy based on manufacturing and industry, often characterized by a high standard of living and advanced technological infrastructure.