In Any Decision About Stimulating the Economy with a Fiscal

question 102

Multiple Choice

In any decision about stimulating the economy with a fiscal expansion (increasing government purchases) ,the government must weigh the short-run benefits of ________ against the long-run costs of ________.

• A)a higher price level; unemployment
• B)increased potential output; a higher price level
• C)a higher price level; lower real GDP
• D)increased real GDP; higher economic growth
• E)increased economic activity; lower economic growth

---

Definitions:

Absolute Measures

Statistical tools used to assess the total magnitude of an entity or phenomenon without comparison to other entities or phenomena.

Profitability

The financial metric that measures the degree to which a company or a project generates profit compared to its costs.

Standards

Established norms or criteria in various fields that define quality, performance, or procedures to ensure consistency and reliability.

Goodwill

An intangible asset that represents the value of a business's brand, customer relations, employee morale, and other factors not reflected in physical or financial assets.