Answered: In the context of fiscal policy and its…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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In the context of fiscal policy and its impact on national debt, consider a government that decides to implement an expansionary fiscal policy during a period of high national debt. What is the most likely immediate impact of this policy on the country's debt-to-GDP ratio, assuming all other factors remain constant? A) The debt-to-GDP ratio will decrease due to increased economic growth. B) The debt-to-GDP ratio will increase as government spending adds to the debt. C) The debt-to-GDP ratio will remain unchanged as fiscal policy does not affect national debt. D) The debt-to-GDP ratio will first decrease then increase due to delayed inflationary effects. Don't use chatgpt please provide valuable answer

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

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