"All for One, but None for All

question 240

Multiple Choice

"All for One, but None for All"
In an article regarding how Great Britain and France are addressing the economic crisis in 2008, Brit prime minister "is eager to encourage consumer spending" while France's president "wants to boo investment in both the private and public sectors." Both leaders are concerned because "hardly a da by without some manufacturing company announcing painful restructuring, plant closures or temporary lay- offs. "
HYPERLINK "http://www.ft.com/" www.ft.com, 11/24/200
If consumption and investment are increased by the governments' policies, we would expect a the short- run Phillips curve.

• A) movement down along the AD curve; movement down along
• B) increase in aggregate demand; rightward shift of
• C) increase in aggregate demand; movement up along
• D) movement up along the AD curve; rightward shift of

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Definitions:

Benefits

The advantages or positive outcomes that come from specific actions, policies, or investments.

Principal-Agent Problem

The conflict that arises when the goals of principals, such as shareholders, differ from those of agents who make decisions on behalf of the principals, like executives.

Democratic Government

A form of government in which power is vested in the hands of the people, who can vote to elect their leaders and influence legislation.

Principal

The original sum of money borrowed in a loan or invested, distinct from interest or profit generated from it.