A Contractionary Fiscal Policy Negates Some of the Leftward Shift

question 112

Multiple Choice

A contractionary fiscal policy negates some of the leftward shift of the aggregate demand curve because the resulting fall in interest rates

• A) increases the quantity of investment, raises the exchange rate and boosts net exports.
• B) discourages savings, decreases the quantity of investment, raises the exchange rate, and reduces net exports.
• C) increases the quantity of investment, lowers the exchange rate, and boosts net exports.
• D) discourages savings, increases consumption, and reduces the quantity of investment and imports.

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Definitions:

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific products or services based on the actual consumption of resources.

Activity Rates

The cost driver rates used in activity-based costing to allocate expenses to products or services based on their consumption of activities.

Number of Guests

The count of attendees or visitors, often used in contexts such as hospitality, events, or services to estimate demand or capacity needs.

Supporting Assembly

A process or component that is part of the larger production of a final product, aiding in the main product's assembly or functionality.