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Steve118

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Fiscal Policy Austerity Measures

Austerity measures can deepen recessions, worsening the very debt they aim to fix

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What is a major risk of implementing austerity measures during an economic downturn?

They can reduce economic growth, leading to lower tax revenues and worsening deficits. They always lead to immediate economic growth by increasing government spending. They have no impact on social welfare or employment levels.

Underground

Underground music and art

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Fiscal Policy Fiscal Tightening

Fiscal tightening can paradoxically deepen recessions despite aiming to stabilize economies

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What is a major risk of implementing fiscal tightening too abruptly during an economic downturn?

It immediately boosts economic growth by increasing government spending. It can reduce overall demand and potentially deepen the recession. It has no impact on unemployment rates or business investment.

Physics_At_Sea

Physicist from London with special interest in Quantum Mechanics

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Macroeconomics Fiscal Policy

How a 1930s economic crisis sparked the birth of modern government economic intervention

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What was the key economic event that led to the development of modern fiscal policy?

The Industrial Revolution The Dot-com Bubble burst The Great Depression of the 1930s

Steeeve

Steeeve is an IT guru

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Macroeconomics Fiscal Policy

How governments use fiscal policy tools to stabilize economies and influence growth

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Which of the following best describes how expansionary fiscal policy influences the economy?

It decreases aggregate demand by raising taxes and cutting government spending to reduce inflation. It primarily controls the money supply through central bank interest rate adjustments. It increases aggregate demand by raising government spending or lowering taxes to stimulate economic growth.

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