If the Economy Is at Point "A" with an Output

question 29

Multiple Choice

If the economy is at point "a" with an output of Y₁ what type of fiscal policy would be used to increase output to Y₂?

• A)Contractionary
• B)Expansionary
• C)Reactionary
• D)Stabilizing

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Definitions:

Government

The governing body of a nation, state, or community, responsible for the direction and administration of public policies, the economy, and public services.

New Businesses

Entrepreneurial ventures that involve the inception and operation of new enterprise initiatives, targeting unique market opportunities.

Five-Year Mark

A significant milestone indicating the completion of five years of operation, often used to assess a business's early success or growth.

Commercial Banks

Financial institutions that offer a wide range of banking services to individuals and businesses, including deposit accounts, loans, and other financial products.