Assuming the economy in the graph shown is currently at equilibrium A, if the government wanted to enact a policy it would likely enact:
A. contractionary fiscal policy in an effort to move aggregate demand to the left.
B. contractionary fiscal policy in an effort to move aggregate demand to the right.
C. expansionary fiscal policy in an effort to move aggregate demand to the right.
D. expansionary fiscal policy in an effort to move aggregate demand to the left.
Answer: C
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Holding money as a medium of exchange to make payments is
A) the capital demand for money. B) the transactions demand for money. C) the precautionary demand for money. D) the asset demand for money.
Suppose Niampora, an island country, is the largest exporter of cotton in its region. A recent flood affected a large part of the country. Which of the following will be an impact of the flood on the supply curve of cotton?
a. The supply curve of cotton will shift rightward. b. The supply curve of cotton will shift leftward. c. The supply curve of cotton will become steeper. d. The supply curve of cotton will become flatter.
When economists discuss the “efficiency” of a market economy, they are referring to ______.
a. the size of the economic pie b. how income is distributed c. its annual productivity rate d. the effectiveness of incentives
Suppose there is a tax cut. This tax cut would have a direct effect on which of the following?
A) financial wealth B) housing wealth C) human wealth D) none of the above