When the federal government cuts taxes and increases purchases to stimulate the economy during a period of recession, such actions are designed to be
A. expansionary.
B. passive.
C. contractionary.
D. automatic.
Answer: A
You might also like to view...
What is the multiplier? What does it determine? Why does it matter?
What will be an ideal response?
High differentials in interest rates suggest that the financial markets of New England, the Middle Atlantic and the South were not integrated with those of New York City
Indicate whether the statement is true or false
The larger is the marginal propensity to consume (MPC)
A) the larger is the multiplier. B) the smaller is the multiplier. C) the smaller is the slope of the consumption function. D) the larger is the slope of the saving function.
The "Asian miracle" refers to the:
A. success countries like Japan, South Korea, and Taiwan have had with export-led growth policy. B. success countries like Japan, South Korea, and Taiwan have had with import substitution policy. C. fact that countries like Japan and South Korea have had consistent growth despite their failing industrial policies. D. high growth in countries like Japan and South Korea despite the absence of a democratic government.