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A big increase in government spending is an example of a positive demand shock.
A demand shock is a sudden event that increases or decreases demand for goods or services temporarily. A positive demand shock increases aggregate demand and a negative demand shock decreases aggregate demand. Therefore there will be an initial inflation with the shock but since demand shocks are temporary and the central bank commits to an inflation rate target, then over time inflation will fall back down to the inflation target.
Expansionary fiscal policy is an increase in government spending or a decrease in taxation, while contractionary fiscal policy is a decrease in government spending or an increase in taxes. Expansionary fiscal policy can be used by governments to stimulate the economy during a recession.
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Answer:
true
Explanation:
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Maturation is a threat to internal validity stemming from either long-term or short-term physiological changes occurring within the participants that may influence the dependent variable.
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What are physiological changes?</h3>
Ageing causes physiological changes in all organ systems. Arteriosclerosis develops, blood pressure rises, and cardiac output declines. Lung function is compromised, vital capacity is reduced, and expiratory flow rates are slowed.
Pregnancy causes a number of physiological changes in the mother, such as an increase in fat and total body water, a drop in plasma protein concentrations, particularly albumin, an increase in blood volume, cardiac output, and blood flow to the kidneys, and a decrease in blood pressure.
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