If the Congress passes legislation to decrease government spending to control demand-pull inflation, then this would be an example of:
A. a contractionary fiscal policy.
B. automatic stabilizers.
C. a nondiscretionary fiscal policy.
D. an expansionary fiscal policy.
Answer: A
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Which of the following changes aggregate supply and shifts the AS curve?
i. a change in the price of a major resource ii. increases in the amount of capital iii. a change in the money income of consumers A) i only B) ii only C) iii only D) i and ii E) i, ii, and iii
If Scotland produces only mead, and England produces only ale, how many pints of ale would buy one pint of mead?
a. no fewer than the opportunity cost of mead in Scotland b. fewer than the opportunity cost of mead in Scotland c. fewer than the opportunity cost of mead in England d. as many pints of mead as you can buy with one pint of ale e. not enough information given
If the real interest rate were above the equilibrium rate, there would be a shortage of loanable funds
a. True b. False Indicate whether the statement is true or false
Ceteris paribus, if the average price level falls, then the _____ effect will result in _____ in the purchases of goods and services.
A. Real balances; an increase B. Foreign trade; a decrease C. Interest rate; a decrease D. Cost; an increase