Suppose the Government Wants to Spend More

question 117

Multiple Choice

Suppose the government wants to spend more.There is no unemployment.Which of the following would be the least inflationary?

• A)Increase government expenditures and sell bonds to the Federal Reserve.
• B)Increase government expenditures and taxes at the same time.
• C)Increase government expenditures and reduce taxes.
• D)Increase government expenditures and use money already in the Treasury to finance these expenditures.
• E)Use the Treasury to finance these expenditures.

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Definitions:

Normality

Normality is a statistical assumption that data or errors are distributed in a normal (or Gaussian) pattern, centered around the mean with symmetrical variability.

Pie Chart

A pie chart is a circular graph divided into slices to illustrate numerical proportion, where the arc length of each slice is proportional to the quantity it represents.

Homoscedasticity

A condition in which the variance within a dataset remains constant across different levels of an independent variable.

Error Variable

A variable in statistical models that captures the difference between observed and predicted values.