"The Only Thing That Results from Expansionary Demand-Side Fiscal Policy

question 100

Multiple Choice

"The only thing that results from expansionary demand-side fiscal policy is that the price level will rise." The economist who said this most likely believes that

• A) there is likely to be a lot of crowding out if government spending rises.
• B) the AS curve is vertical.
• C) there is unlikely to be much crowding out if government spending rises.
• D) investment is interest inelastic.
• E) b and c

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Definitions:

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly paired; a response that is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.

Reinforcement

In behavioral psychology, a consequence applied that will strengthen an organism's future behavior whenever that behavior is preceded by a specific antecedent stimulus.

Study Habits

Methods and practices used consistently to acquire new knowledge or skills.

Operant Conditioning

A form of learning in which a voluntary response is strengthened or weakened by its association with positive or negative consequences.