To Reduce the Size of Economic Fluctuations, the Government Could

question 109

Multiple Choice

To reduce the size of economic fluctuations, the government could

• A)make fewer permanent changes in government spending.
• B)change government purchases often to encourage a shift of the aggregate demand curve.
• C)increase spending during a recession and decrease spending during an expansion.
• D)keep government spending fixed to avoid shifting the aggregate demand curve.
• E)continually increase government spending to shift the aggregate demand curve to the right.

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Definitions:

Larger Request

A strategy in persuasion and social influence where a bigger, often less achievable, request is made knowing it could be refused in favor of a smaller one that is the real aim.

Self-perception Theory

A psychological theory that suggests individuals infer their own attitudes and emotional states by observing their own behavior and the context in which it occurs.

Inferences

The process of drawing logical conclusions from available information, premises, or evidence.

Attitudes

Cognitive biases that result in the assessment of a specific something with varying levels of approval or disapproval.