In the Keynesian-Cross Model, Fiscal Policy Has a Multiplied Effect

question 120

Multiple Choice

In the Keynesian-cross model, fiscal policy has a multiplied effect on income because fiscal policy:

• A) increases the amount of money in the economy.
• B) changes income, which changes consumption, which further changes income.
• C) is government spending and, therefore, more powerful than private spending.
• D) changes the interest rate.

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Definitions:

Cost Reduction

Strategies or actions taken to lower expenses and increase efficiency in business operations.

Cross-functional Teams

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Environmentally Sound Operations

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Business and Government

The interaction and relationship between commercial enterprises and governmental bodies, influencing regulations, policies, and economic conditions.