A Fiscal Policy Action to Close an Expansionary Gap Is

question 1

Multiple Choice

A fiscal policy action to close an expansionary gap is to

• A) increase taxes.
• B) increase transfer payments.
• C) increase government purchases.
• D) increase the marginal propensity to consume.
• E) increase potential output.

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Definitions:

Patents

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Innovation

The introduction of new ideas, goods, services, and practices to the market, which significantly improves or enhances value.

Invention

The creation of a new product, process, or idea that did not exist before, which typically involves innovation and creativity.

Natural Monopoly

A market condition where a single supplier is most efficient in providing goods or services due to high fixed or startup costs.