Expansionary Fiscal Policy Is Designed to

question 105

Multiple Choice

Expansionary fiscal policy is designed to

• A)increase real national income and increase the price level.
• B)reduce real national income and reduce the price level.
• C)raise both real national income and the price level.
• D)raise the price level only.

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Definitions:

Financial Security

An investment instrument issued by corporations, governments, or other entities that signifies ownership or a creditor relationship and promises payment of a financial obligation.

Risk-Averse Investors

Individuals who prefer to minimize their exposure to risk and are often willing to accept lower returns in exchange for greater certainty.

Risk-Neutral Investors

Investors who are indifferent to the risk of their investments, focusing solely on the expected returns without considering the variability of those returns.

Risk-Loving Investors

Individuals who prefer investments with a high level of risk in the hope of realizing higher returns compared to safer investments.