Which of the Following Represents the Most Contractionary Fiscal Policy

question 169

Multiple Choice

Which of the following represents the most contractionary fiscal policy?

• A)a $30 billion tax cut
• B)a $30 billion increase in government spending
• C)a $30 billion tax increase
• D)a $30 billion decrease in government spending.

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Definitions:

Law of Effect

A principle stating that behaviors followed by satisfying consequences are more likely to be repeated, while those followed by unsatisfying consequences are less likely to be repeated.

Reinforcement

In behavioral psychology, a process by which a behavior is strengthened or increased by its consequences.

Positive Reinforcement

A method of behavior modification that involves rewarding a desired behavior in order to increase the likelihood of it occurring again.

Watson

Psychologist John B. Watson, known as the father of behaviorism, emphasized the study of observable behavior.