Which of the following will be a short run impact of a pre-election expansionary fiscal policy, public expectations remaining constant?
A)An increase in unemployment
B)A decline in real GDP
C)An increase in real GDP
D)A fall in the rate of inflation
E)An economic recession

Question

Quizplus · Accepted Answer

Pre-election expansionary fiscal policy, such as increased government spending or tax cuts, would lead to an increase in aggregate demand and ultimately result in an increase in real GDP in the short run.

Which of the Following Will Be a Short Run Impact