Suppose That Instead of Using Discretionary Fiscal Policy to Close

question 52

Multiple Choice

Suppose that instead of using discretionary fiscal policy to close an expansionary gap,policy makers left the economy alone.What would probably happen?

• A)depression would result
• B)the economy would be stuck in an expansionary gap
• C)the aggregate demand curve would shift,eliminating the problem
• D)the gap would close after a spurt of inflation
• E)the short-run aggregate supply curve would shift to the right

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Definitions:

Associative Cue

A stimulus or sign that is linked to and triggers the recall of information, memories, or responses.

Long-Term Memory

The stage of memory involved in the storage and retrieval of information over an extended period.

Serial-Order Effect

A phenomenon observed in psychology where the order of information presentation affects memory and recall, with items presented early and late being remembered better than those in the middle.

List

A record of items, names, or tasks to be remembered, considered, or done, arranged in a systematic or sequential order.