A Contractionary Fiscal Policy Shifts the Aggregate Demand Curve

question 146

Multiple Choice

A contractionary fiscal policy shifts the aggregate demand curve

• A) to the right and is used to close an inflationary gap.
• B) to the right and is used to close a recessionary gap.
• C) to the left and is used to close an inflationary gap.
• D) to the left and is used to close a recessionary gap.

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Definitions:

Functions

Activities or roles that are natural to or the purpose of a person or thing.

Political Scientists

Scholars who study the origin, development, and operation of political systems and public policy.

Government

The organization, or group of individuals and institutions, that has the authority to make and enforce laws and decisions for a specific community, region, or country.

Private Goods

Goods that are characteristically excludable and rivalrous, meaning their use is limited to paying customers and one person's consumption prevents another's.