Related to the Economics in Practice on P

question 47

Multiple Choice

Related to the Economics in Practice on p. 238: An earthquake destroyed 50% of the Moldovian manufacturing base. The Moldovian government decided to use a contractionary fiscal policy to counter the effects of the earthquake on the economy. The use of the contractionary fiscal policy would have caused

• A) the price level to be lower and the output level to be higher than they would have been without the policy action.
• B) both the price level and the output level to be higher than they would have been without the policy action.
• C) both the price level and output level to be lower than what they would have been without the policy action.
• D) the price level to be higher and the output level to be lower than they would have been without the policy action.

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Definitions:

Divergent Thinking

A mental process or procedure aimed at creating original ideas by investigating various possible responses.

Mind Mapping

A visual diagramming technique used to organize information, ideas, or thoughts around a central concept.

Mental Image

A picture or visual representation created by the mind that is not currently being perceived through the senses.

Gardner's Theory

Howard Gardner's theory of multiple intelligences, which proposes that people possess various kinds of cognitive strengths, encompassing linguistic, logical-mathematical, spatial, musical, bodily-kinesthetic, interpersonal, intrapersonal, and naturalistic intelligences.