One Advantage of Using Expansionary Fiscal Policy Rather Than Relying

question 8

Multiple Choice

One advantage of using expansionary fiscal policy rather than relying on automatic adjustment to recover from a recessionary gap is that

• A)the economy will overshoot potential GDP and a boom will be underway.
• B)inflation will not be as stimulated.
• C)price level will rise higher than otherwise.
• D)the recovery may be more rapid.
• E)the recovery will be slower,thereby causing less disruption.

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Definitions:

Explanation

States and justifies reasoning in terms of the evidential, conceptual, methodological, criteriological, and contextual considerations upon which one’s results were based; also presents one’s reasoning in the form of cogent arguments.

Inference

The act of reaching a conclusion based on evidence and reasoning rather than explicit statements.

Cultivate

To develop or improve by education or training; to foster growth or development.

Positive Critical Thinking

The application of critical analysis and evaluation in a constructive and optimistic manner to solve problems or make decisions.