The claim that reducing deficits in an economy with high rates of unemployment will help even in the short run by improving confidence is called:
A) quantitative easing.
B) fiscal stimulus.
C) expansionary austerity.
D) a credit crunch.

Question

Quizplus · Accepted Answer

The concept of "expansionary austerity" suggests that reducing deficits, even in economies with high unemployment, can be beneficial in the short term by boosting confidence among investors and consumers. This theory posits that fiscal consolidation and austerity measures can lead to economic expansion through increased confidence in the economy's fiscal health.

The Claim That Reducing Deficits in an Economy with High