Which of the Following Will Be a Short Run Impact

question 78

Multiple Choice

Which of the following will be a short run impact of a pre-election expansionary fiscal policy, public expectations remaining constant?

• A)An increase in unemployment
• B)A decline in real GDP
• C)An increase in real GDP
• D)A fall in the rate of inflation
• E)An economic recession

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Definitions:

Tax Liability

The total amount of tax owed to a taxing authority, such as the government, based on taxable income and tax rate.

Tax Revenue

The income that is gained by governments through taxation, used to fund public services and government obligations.

Social Security

A government program that provides financial assistance to people with inadequate or no income, primarily the elderly, disabled, and families with dependent children.

Medicare

A federal health insurance program in the United States for people age 65 and older, and for some younger people with disabilities.