Which of the following would be most likely to induce Congress and the

Which of the following would be most likely to induce

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101) Which of the following would be most likely to induce Congress and the president to conductcontractionary fiscal policy? A significant A) increase in labor productivity.B) decrease in oil prices.C) decrease in real GDP.D) increase in inflation.Answer: D 101) Page Ref: 948/566 Learning Outcome: Macro - 13: Discuss the key measures, theories, and effects of inflation and deflation. 102) If the economy is slipping into a recession, which of the following would be an appropriate fiscalpolicy? 102) Page Ref: 947 - 948/565 - 566 Learning Outcome: Macro - 9: Discuss fundamental approaches to fiscal policy. 24
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Figure 16 - 7 103)Refer to Figure 16-7.Given that the economy has moved fromAtoBin the graph above, whichof the following would be the appropriate fiscal policy to achieve potential GDP? 103) Page Ref: 947 - 948/565 - 566 Learning Outcome: Macro - 6: Explain the aggregate supply - aggregate demand model. 104) Expansionary fiscal policy ________ the price level and ________ equilibrium real GDP. 104) Page Ref: 947 - 948/565 - 566 Learning Outcome: Macro - 9: Discuss fundamental approaches to fiscal policy. 105) If policymakers are concerned that the economy is in danger of rising inflation because aggregatedemand is increasing faster than aggregate supply, the appropriate fiscal policy response is to A) use expansionary fiscal policy.B) increase interest rates.C) increase taxes.D) increase government spending.Answer: C 105) Page Ref: 947 - 948/565 - 566 Learning Outcome: Macro - 9: Discuss fundamental approaches to fiscal policy. 25
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