If the Effects of Expansionary Fiscal Policy Hit When the Economy

question 62

Multiple Choice

If the effects of expansionary fiscal policy hit when the economy is already expanding,

• A) the effects could lead to even deeper recession.
• B) the policy will have no effect.
• C) the policy is called an automatic stabilizer.
• D) it may lead to excessive aggregate demand and inflation.
• E) it will lead to high rates of unemployment along with high rates of inflation,known as stagflation.

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Definitions:

Reluctance

Resistance to magnetism.

Resistance

A measure of an object's opposition to the flow of electric current, resulting in electrical energy being dissipated as heat.

Material's

Pertaining to the substance or substances from which something is or can be made, often highlighting properties or characteristics.

Flux Density

The number of magnetic lines contained in a certain area. The area measurement depends on the system of measurement.