In the Keynesian-Cross Model, Fiscal Policy Has a Multiplied Effect

question 120

Multiple Choice

In the Keynesian-cross model, fiscal policy has a multiplied effect on income because fiscal policy:

• A) increases the amount of money in the economy.
• B) changes income, which changes consumption, which further changes income.
• C) is government spending and, therefore, more powerful than private spending.
• D) changes the interest rate.

---

Definitions:

Action Potential

A temporary reversal of the electrical potential along the membrane of a nerve cell or muscle cell, allowing for the transmission of signals.

Cardiac Cycle

The complete sequence of events in the heart from the beginning of one heartbeat to the beginning of the next, including systole and diastole phases.

Diastole

The phase of the heartbeat when the heart muscle relaxes and allows the chambers to fill with blood.

Heart Chambers

The four compartments of the heart including two atria and two ventricles, involved in pumping blood throughout the body.