If the economy has been producing at a point where real GDP is less than potential GDP, what fiscal policy can the federal government use to restore real GDP to potential GDP?
A) increase taxes
B) decrease the quantity of money
C) cut government expenditure on goods and services
D) raise the interest rate
E) cut taxes
Correct Answer:
Verified
Q90: An example of a discretionary fiscal stimulus
Q91: When government outlays exceed tax revenues, the
Q92: Government expenditure-------------------- change potential GDP and taxes--------------------
Q93: As contrasted to the Keynesian view, mainstream
Q94: When tax revenues--------------------outlays is positive, then the
Q96: When the government's outlays exceed its tax
Q97: If the economy has a structural deficit
Q98: A decrease in taxes should be applied
Q99: Fiscal policies that move the economy toward
Q100: When the economy is in a recession,--------------------
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