Suppose Aggregate Demand Fell

question 119

Multiple Choice

Suppose aggregate demand fell. In order to stabilize the economy, what might the government do?

• A) increase the interest rate
• B) decrease the money supply
• C) increase government spending
• D) decrease the government expenditures

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Definitions:

Lawful

That which is permitted by law; adhering to legal statutes and regulations.

Concerted Action

A collaborative effort by two or more parties to achieve a specific goal, often used in labor disputes.

Wholly Owned Subsidiary

A company whose entire share capital is held by another company.

Monopoly Power

The ability of a single seller in a market to control the prices and supply of a product or service, limiting competition.