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.
Answer: D
You might also like to view...
Much of the research on the minimum efficient scale suggests that for many firms the LRAC curve is:
A) downward sloping over the relevant range of output. B) upward sloping over the relevant range of output. C) U-shaped. D) flat over a relatively large range of output levels.
A perfectly inelastic demand curve exhibits
A) zero responsiveness to changes in price. B) zero quantity demanded when there is a slight change in price. C) a change in quantity demanded that is proportional to the change in price. D) a change in quantity demanded that is always twenty percent of the change in price.
If inventory investment during a year was minus $6 billion, producers must have
a. produced only $6 billion of new capital assets during the year. b. sold $6 billion more goods and services during the year than they produced. c. added goods valued at $6 billion to their stock of unsold goods and raw materials. d. produced new capital assets that exceeded the depreciation allowance by $6 billion.
Monopolistically competitive markets differ from perfectly competitive markets due to (i) the number of sellers. (ii) the barriers to entry. (iii) the product differentiation among the sellers
a. (i) only b. (iii) only c. (i) and (iii) only d. (ii) and (iii) only