Which One of the Following Would Be Most Compatible with the Goals

question 149

Multiple Choice

Which one of the following would be most compatible with the goals of the government to both improve economic growth and reduce the trade deficit?

• A)a restrictive monetary policy
• B)an expansionary monetary policy
• C)a contractionary fiscal policy
• D)an expansionary fiscal policy

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Definitions:

Price Elasticity

The determination of how price alterations influence the market demand for a commodity.

Marginal Value

The additional satisfaction or utility received by consuming one more unit of a good or service.

Consumer's Demand

The desire of purchasers, users, or consumers for specific goods or services at a given price over a specified period.

Substitution Effect

The economic principle that as prices rise or incomes decrease, consumers will replace more expensive items with less costly alternatives.