Figure 12-1 -Refer to Figure 12-1. in This Situation, If Policymakers Want

question 79

Multiple Choice

Figure 12-1
-Refer to Figure 12-1. In this situation, if policymakers want to close the output gap with fiscal policies that will stimulate aggregate demand, what should they do?

• A) establish a consumption tax to encourage savings
• B) increase government spending
• C) loosen environmental regulations to lower businesses cost of production
• D) raise interest rates

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Definitions:

1830

A year marked by significant global events, including revolutions across Europe and the passage of the Indian Removal Act in the United States.

Frederick Jackson Turner

An American historian known for his "Frontier Thesis," which argued that the American democracy was largely formed by the American frontier.

Western Frontier

The geographical area of the United States west of the Mississippi River during the 19th century, known for its exploration, settlement, and expansion.

John C. Frémont

An American explorer, military officer, and politician known for his role in the U.S. expansion and the Bear Flag Revolt during the Mexican-American War.