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:

Manic-Depressive Illness

Also known as bipolar disorder, a mental health condition characterized by extreme mood swings, including emotional highs (mania or hypomania) and lows (depression).

Probability

The chance or likelihood that an event will happen, quantified as a number between 0 (impossible) and 1 (certain).

Biased Coin

A modified or manipulated coin which does not have an equal probability of landing on heads or tails, thus influencing the outcome of a flip.

Probability

The likelihood of an event happening is measured on a scale from 0 to 1, where 0 equals no chance of occurring and 1 denotes definite occurrence.