Which Policy Would Keynes's Followers Support When an Increase in Business

question 15

Multiple Choice

Which policy would Keynes's followers support when an increase in business optimism shifts the aggregate demand curve to the right away from long-run equilibrium?

• A) decreasing taxes
• B) decreasing the interest rate
• C) increasing the money supply
• D) increasing taxes

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Definitions:

Tolerance

A person's diminished response to a drug, which occurs when the drug is used repeatedly and the body adapts to its presence.

Intoxicated

Refers to the condition of being under the influence of alcohol or drugs, which impairs cognitive and physical functions.

Psychoactive Drugs

Substances that affect the mind, mood, or other mental processes.

Neurotransmitter

Chemical messengers that transmit signals across the synaptic gaps between neurons.