Suppose the Economy Is in an Equilibrium in Which Real

question 107

Multiple Choice

Suppose the economy is in an equilibrium in which real GDP is less than potential GDP.To increase real GDP,the government can use a fiscal stimulus of

• A)increasing taxes only.
• B)decreasing government expenditure only.
• C)decreasing taxes and/or increasing government expenditure.
• D)decreasing government expenditure and simultaneously increasing taxes.
• E)increasing the quantity of money.

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Definitions:

Financial Security

A state of having stable income or other resources to support a standard of living now and in the foreseeable future.

Spiritual Matters

Concerns or activities related to the soul, the spirit, or the sacred, often involving questions of meaning and existential significance.

Cohabitation

Couples living together without being married.

Alternative

Referring to one or more options or choices apart from the conventional or usual.