A Contractionary Fiscal Policy Is Likely to

question 95

Multiple Choice

A contractionary fiscal policy is likely to

• A) increase government borrowing, thereby shifting the supply curve for bonds to the right.
• B) reduce government borrowing, thereby shifting the supply curve for bonds to the left.
• C) increase government borrowing, thereby shifting the demand curve for bonds to the right.
• D) reduce government borrowing, thereby shifting the demand curve for bonds to the left.

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Definitions:

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