The Traditional Keynesian Approach to Fiscal Policy Assumes That

question 249

Multiple Choice

The traditional Keynesian approach to fiscal policy assumes that

• A) the effect of unemployment compensation is to destabilize the economy.
• B) an equal income distribution ensures a stable economy.
• C) consumers spend more when their incomes are higher.
• D) cutting taxes is a more effective way to stimulate the economy than is increasing government spending.

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Definitions:

Seventeenth-Century America

Refers to North America in the 1600s, a period marked by settlement and colonial development particularly along the East Coast.

African Slavery

The forced labor and enslavement of African peoples, primarily seen in the context of the transatlantic slave trade and colonial plantation systems.

Catholic Spain

Refers to the period and culture in Spanish history when Catholicism was the state religion, impacting its politics, culture, and global explorations.

Imperial Endeavors

Refers to the efforts and actions taken by a nation, empire, or its leaders to expand their dominion and influence over other territories and peoples.