Figure 7-6 -Refer to Figure 7-6. Suppose the Economy Is Initially in Is

question 121

Multiple Choice

Figure 7-6
-Refer to Figure 7-6. Suppose the economy is initially in short-run equilibrium at B. If policy-makers decide to intervene to close the gap, which of the following can it do?

• A) Decrease personal income taxes.
• B) Increase government welfare spending.
• C) Decrease the level of government purchases of goods and services.
• D) Institute investment tax credits to encourage business investment.

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Definitions:

Social Security

A government program designed to provide financial assistance to people with insufficient or no income, mainly targeting the elderly, disabled, and unemployed.

Directional Hypothesis

A hypothesis indicating the expected direction of difference or linkage between variables.

Fear Of Crime

An emotional response characterized by anxiety or concern about becoming a victim of crime.

Dependent Variable

A variable in an experiment or study that is expected to change in response to changes in another variable, known as the independent variable.