If Policymakers Implement an Expansionary Fiscal Policy but Do Not

question 201

Multiple Choice

If policymakers implement an expansionary fiscal policy but do not take into account the potential for crowding out,the new equilibrium level of GDP is likely to

• A)be at potential GDP.
• B)be above potential GDP.
• C)be below potential GDP.
• D)There is insufficient information given here to draw a conclusion.

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Definitions:

Epidermis

The outermost layer of cells in plants and animals, serving as a protective barrier against environmental threats.

Cortex

In plants, the layer of tissue between the vascular bundle and the epidermis in stem and root; in the brain, the outer layer of neural tissue.

Casparian Strips

A band of cell wall material found in the endodermal cells of plant roots, blocking the passive flow of substances into the plant's vasculature.

Endodermis

The innermost layer of cells in the cortex of plants, serving as a selective barrier that regulates the passage of substances from the soil into the vascular cylinder.