If the economy is experiencing inflation, then the most appropriate government policy would be to:
A. shift the aggregate demand curve by using a tax increase coupled with spending cuts.
B. shift the aggregate demand curve by using a tax increase coupled with more spending.
C. shift the aggregate demand curve by using a tax cut coupled with spending cuts.
D. shift the aggregate supply curve by using a tax cut coupled with more spending.
Answer: A
You might also like to view...
The most significant factor enabling unions to negotiate increased wages for its members is likely: a. that unions increase the demand for labor
b. that unions decrease the supply of labor in the union sector. c. that unions increase the marginal product of labor. d. that unions increase the supply of labor in the union sector.
The percentage of the burden of an excise tax that is borne by sellers generally depends on the
a. size of the tax. b. relationship between the elasticity of demand and the elasticity of supply. c. elasticity of demand. d. elasticity of supply.
Refer to Scenario 17.4. If there is no flood insurance and no flood control system is in place, the expected loss from a flood is
A) $5,000. B) $10,000. C) $100,000. D) $200,000. E) $1,000,000.
Laura Kaid owns a business and is willing to invest in capital until, at the margin, her investment yields a cash stream with a present value less than the marginal cost of the investment
a. True b. False