Expansionary fiscal policy is used to
A. make businesses more efficient.
B. encourage private saving.
C. flight inflation.
D. fight recessions.
Answer: D
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When the Federal Reserve decreases the money supply, it generally does so by purchasing bonds
Indicate whether the statement is true or false
During the 1990s, Canada had an average inflation rate of 1.5 percent while Columbia had an average inflation rate of 21.5 percent. You would expect that nominal interest rates in Canada are
A) unpredictably different from nominal interest rates in Columbia. B) greater than nominal interest rates in Columbia. C) less than nominal interest rates in Columbia. D) not comparable to nominal interest rates in Columbia. E) equal to nominal interest rates in Columbia.
According to the benefits-received principle, those who receive the benefits from a government program should pay the taxes that support the program
Indicate whether the statement is true or false
A bank creates money when it:
a. gets new checkable deposits which the depositor formerly held as cash. b. has a loan paid off, which creates excess reserves for the bank. c. makes a loan from its excess reserves. d. holds back excess reserves because of an increase in the required reserve ratio. e. gets more excess reserves because of a decrease in the required reserve ratio.