Fiscal Expansion

question 82

Multiple Choice

Fiscal expansion

• A) stimulates aggregate demand and causes output to decline.
• B) decreases aggregate demand and causes output to decline.
• C) stimulates aggregate demand and causes output to rise.
• D) decreases aggregate demand and causes output to rise.
• E) decreases government expenditures.

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Definitions:

Real Wages

Wages or salaries that have been adjusted for inflation, indicating the purchasing power of the income received by workers.

CPI

The Consumer Price Index is an indicator that calculates the weighted average price of a selection of consumer goods and services, including food, medical care, and transportation.

Real Wages

The purchasing power of wages, taking into account inflation, reflecting the amount of goods and services that can be bought with the wages earned.

Minimum Wage

The lowest legally allowable pay per hour for workers.