Which of the Following Is an Appropriate Fiscal Policy Response

question 72

Multiple Choice

Which of the following is an appropriate fiscal policy response to high inflation?

• A)increase interest rates
• B)increase government purchases
• C)increase transfer payments
• D)none of the above

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Definitions:

Constitutional Source

The origin or basis of a legal principle found within a constitution.

Cooperative Federalism

An approach to federalism where national, local, and state governments work collaboratively and jointly to address mutual issues, instead of formulating policies independently.

Concurrent Powers

Powers that are shared by both the federal and state governments in the United States, allowing both to legislate on the same issues.

States' Rights

The rights and powers held by individual U.S. states rather than by the federal government, derived from the Tenth Amendment to the Constitution.