Fiscal policy most directly affects the economy by increasing or decreasing:

A. long-run aggregate supply.
B. the money supply.
C. interest rate.
D. aggregate demand.


Answer: D

Economics

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Fill in the blank(s) with the appropriate word(s).

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An example of a good that is rival in consumption is:

A. a radio program. B. a copy of an economics textbook. C. an economics web page. D. a lighthouse.

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Refer to the above figure. Suppose the economy is at E originally, when the dollar increases in value. Which aggregate supply curve applies if the value of real GDP increases?

A. 1 B. 2 C. 4 D. 5

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A given reduction in government spending will dampen demand-pull inflation by a greater amount when the:

A. Economy's MPS is large B. Economy's aggregate supply curve is flat C. Economy's aggregate supply curve is steep D. Unemployment rate is high

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