Under Which of the Following Situations Can Fiscal Policy Affect

question 12

Multiple Choice

Under which of the following situations can fiscal policy affect people's expectations​?

• A)​If the interest rate on borrowing is higher than the interest rate on lending
• B)​If the interest rate on lending is more than the interest rate on borrowing
• C)​If the interest rate on borrowing and lending are the same
• D)​If the interest rate on lending changes more than a change in the interest rate on borrowing

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Definitions:

Oligopoly

A market structure characterized by a small number of firms controlling a large majority of the market share, influencing prices and competition.

Monopolistic Competition

A market structure where many firms sell products that are similar but not identical.

Pure Monopoly

A market structure where a single firm is the sole provider of a product or service, facing no competition.

Demand Factors

Elements that influence the level of demand for a product or service, such as price, consumer preferences, income levels, and market trends.