Fiscal and Monetary Policies Are Most Effective in Reducing Inflation

question 61

Multiple Choice

Fiscal and monetary policies are most effective in reducing inflation when the aggregate

• A)Supply curve is horizontal.
• B)Supply curve is vertical.
• C)Supply curve is upward-sloping but not vertical.

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Definitions:

Normative

Refers to prescriptive concepts, reflecting beliefs about what ought to be rather than what is.

Positive

In the context of economics, a situation or correlation in which an increase in one variable leads to an increase in another variable.

Normative

Pertaining to statements or norms that express values, judgments, or opinions on what should be, rather than what is.

Normative Statement

A type of statement that expresses a value judgment about what ought to be, based on personal beliefs rather than hard facts.