Contractionary fiscal policy is deliberate government action to influence aggregate demand and the level of real GDP through:
a. expanding and contracting the money supply.
b. encouraging business to expand or contract investment.
c. regulating net exports.
d. decreasing government spending or increasing taxes.
d
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The M1 definition of the money supply includes all of the following EXCEPT
A) savings accounts. B) transaction deposits. C) currency. D) travelers checks.
Consider the production possibilities frontier in the figure shown. The opportunity cost of moving from point A to point B is:
A. 5 cars per cigar.
B. 10 cars per cigar.
C. 5 cigars per car.
D. 10 cigars per car.
Business cycles are short-term fluctuations in the economy relative to the long- term trend in ______.
a. interest rates b. inflation c. output d. employment
When the required reserve ratio is changed,
A. the money multiplier is changed but the amount of excess reserves in the banking system is unchanged. B. the money multiplier is unchanged but the amount of excess reserves in the banking system is changed. C. the size of the money multiplier and the amount of excess reserves change in the opposite direction from the required reserve ratio. D. the size of the money multiplier and the amount of excess reserves change in the same direction as the required reserve ratio.