Multiple Choice
The economy is in a recessionary gap and a Keynesian economist advocates expansionary fiscal policy.What is a likely reason this economist advocates expansionary fiscal policy?
A) The economist believes the economy is stuck in a recessionary gap and crowding out will be complete.
B) The economist believes the economy is stuck in a recessionary gap and there will be no crowding out.
C) The economist believes that wages are too flexible and that crowding out will be incomplete.
D) The economist believes the AD curve is downward-sloping,the SRAS curve is upward-sloping,and prices are flexible.
E) none of the above
Correct Answer:
Verified
Correct Answer:
Verified
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