Which of the Following Would Be the Most Contractionary

question 48

Multiple Choice

Which of the following would be the most contractionary?

• A)a $20 billion increase in taxes
• B)$20 billion increases in both government purchases and taxes
• C)$20 billion decreases in both government purchases and taxes
• D)a $20 billion decrease in government purchases
• E)a $20 billion decrease in taxes

---

Definitions:

Reliance

The act of depending or counting on something or someone, often used in legal contexts to describe a situation where one party bases a decision on the assurances or promises of another.

Misrepresentation

The act of providing false or misleading information with the intent to deceive someone into entering into an agreement.

Duress

Unlawful pressure brought to bear on a person, causing the person to perform an act that he or she would not otherwise perform (or refrain from doing something that he or she would otherwise do).

Entire Transaction

The complete process or series of associated dealings, typically concerning a business or financial agreement.