During Which of the Following Situations Would You Advise for Expansionary

question 49

Multiple Choice

During which of the following situations would you advise for expansionary fiscal policy?

• A) when current output is above full employment output
• B) when the economy is expanding at a rapid pace
• C) when inflation is at 10% per year
• D) when the current unemployment rate is below the natural rate of unemployment
• E) when the current unemployment rate is above the natural rate of unemployment

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Definitions:

Decade

A span lasting a decade.

Roosevelt Administration

The period of U.S. governance under President Franklin D. Roosevelt from 1933 to 1945, known for the New Deal programs.

Federal Reserve Board

The governing body of the Federal Reserve System, overseeing the U.S. central banking system and responsible for regulating the nation's monetary policy.

Recession 1937-38

A sharp economic downturn that occurred during the late 1930s in the United States, part of the larger Great Depression era, marked by high unemployment and deflation.