Suppose the economy is experiencing a recessionary gap at the current level of GDP. Which of the following fiscal policy actions would be most appropriate given this gap?
A. decreasing taxes
B. increasing interest rates
C. a simultaneous and equal increase in taxes and increase in government spending
D. inreasing the money supply
Answer: A
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Which of the following describes when government alter normal market activity?
A. Innovation B. Intervention C. Market failure D. Unprofitable outcome
If the demand curve for open-heart surgery is vertical for people with serious heart conditions, then the demand for open-heart surgery is ________ with respect to price.
A. unit elastic B. inelastic C. perfectly inelastic D. perfectly elastic
Every time a new bank loan is made, M1 and M2 increase, demand deposits increase, and bank assets increase
a. true b. false
An increase in demand is shown graphically by
A. a shift of the demand curve to the right. B. a movement up along the existing curve. C. a shift of the demand curve to the left. D. a movement down the existing curve.