Expansionary Fiscal Policy Is Used to

question 160

Multiple Choice

Expansionary fiscal policy is used to

• A)combat inflation.
• B)combat recessions.
• C)encourage private saving.
• D)make businesses more efficient.

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Definitions:

Binding Price Ceiling

A government-imposed price control set below the market equilibrium price, leading to shortages as the quantity demanded exceeds the quantity supplied at that price level.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price point.

Quantity Supplied

The amount of a commodity that producers are willing and able to offer for sale at a specific price over a defined period of time.

Binding Price Ceiling

A legal maximum price for a good or service that is set below the equilibrium price, resulting in shortages.