If the Government Wants to Engage in Fiscal Policy to Increase

question 224

Multiple Choice

If the government wants to engage in fiscal policy to increase real GDP, it could

• A) decrease government expenditure in order to increase short- run aggregate supply.
• B) increase government expenditure in order to increase short- run aggregate supply.
• C) decrease government expenditure in order to decrease aggregate demand.
• D) increase government expenditure in order to increase aggregate demand.

---

Definitions:

Mediating Variables

Elements within a cause-and-effect relationship that explain the mechanism through which the independent variable affects the dependent variable.

Contingency Approaches

Management theories suggesting that the best way to handle any situation depends on the specific circumstances, rather than a one-size-fits-all solution.

Leader Behavior

The actions and conduct exhibited by individuals in leadership positions, influencing the group's activities and the achievement of its goals.

Leadership Effectiveness

The degree to which a leader is able to achieve desired objectives or outcomes by influencing others.