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:

Companies

Legal entities formed of individuals, shareholders, or members, aimed at operating for profit.

Excess Return

The return on an investment that exceeds the risk-free rate or a comparative benchmark or index.

Merger

A corporate strategy of combining distinct businesses under a single entity to enhance competitiveness and efficiency.