When an Economy Experiences a Negative Real Shock,fiscal Policy

question 150

Multiple Choice

When an economy experiences a negative real shock,fiscal policy:

• A) using tax cuts is appropriate.
• B) using increased government expenditures is appropriate.
• C) is generally not appropriate.
• D) is never used by politicians.

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Definitions:

Future

The indefinite time period after the present, often considered in the context of possibilities or uncertainties.

Surplus

The amount by which the quantity supplied of a product exceeds the quantity demanded at a specific price.

Excess Demand

A situation in a market where the quantity demanded of a good or service exceeds the quantity supplied at the current price.

Market Supply Curve

A graphical representation showing the relationship between the price of a good and the total output produced by all firms in the market.