Figure 12-3 -Refer to Figure 12-3. If the Aggregate Demand Curve Is

question 10

Multiple Choice

Figure 12-3
-Refer to Figure 12-3. If the aggregate demand curve is AD₁, which of the following is the most
Appropriate discretionary fiscal policy to pursue?

• A) a contractionary fiscal policy involving reductions in government spending and increases in income tax rates
• B) a contractionary fiscal policy involving reductions in government spending and decreases in income tax rates
• C) an expansionary fiscal policy involving increases in government spending and increases in investment tax credits
• D) an expansionary fiscal policy involving increases in government spending and decreases in investment tax credits

---

Definitions:

Interstate Commerce

Business activities that touch more than one state.

In-State Activity

Economic, academic, or social actions and engagements that occur within a specific state's boundaries.

Unanimous Vote

A voting outcome where all members of a group fully agree on a decision or proposition without any dissent.

Shareholders

Persons who own units of ownership interest called shares of stock in a corporation. Also called stockholders.