What Effect Do Expansionary Monetary and Fiscal Policies Have on the Economy

question 27

Multiple Choice

What effect do expansionary monetary and fiscal policies have on the economy?

• A)They reduce the severity of recessions
• B)They increase balance-of-payment surpluses
• C)They tend to decrease deficits
• D)They may take the economy into recession

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Definitions:

Cognitive Aspect

Refers to the mental processes involved in gaining knowledge and comprehension, including thinking, knowing, remembering, and problem-solving.

Richard Lazarus

A psychologist who was a pioneer in the study of emotion and stress, especially in the context of cognitive appraisal.

Theory of Emotion

A psychological framework that attempts to explain the complex relationships between cognitive processes, physiological responses, and the experience and expression of emotions.

Physical Arousal

The physiological response of the body to stimuli, which can manifest in increased heart rate, energy, and often sexual readiness.