Although Economists Usually Focus on the Role of Fiscal Policy

question 130

Multiple Choice

Although economists usually focus on the role of fiscal policy as a stabilization tool for closing a recessionary gap,in practice,fiscal policy may also influence

• A) the economy's potential output and the distribution of income.
• B) the distribution of income and the level of private capital formation.
• C) the economy's potential output,the distribution of income,and the level of private capital formation.
• D) the economy's potential output,the distribution of income,and the economic behaviour of firms and households.
• E) the economy's potential output,the distribution of income,the level of private capital formation,and the economic behaviour of firms and households.

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Definitions:

Homeostasis

Homeostasis is the process through which biological systems maintain internal equilibrium by adjusting physiological processes.

Brain

The central organ of the human nervous system, responsible for processing sensory information, directing motor responses, and coordinating mental functions.

Hedonism

A philosophical concept that suggests the pursuit of pleasure and intrinsic goods are the primary or most important goals of human life.

Growth Motivation

The desire to achieve personal development and self-improvement, beyond basic needs or external rewards.