Figure 16-2 -Suppose That Figure 16-2 Shows the Effects of Reducing the of Reducing

question 51

Multiple Choice

Figure 16-2
-Suppose that Figure 16-2 shows the effects of reducing the budget deficit by raising taxes.If authorities do not want real GDP to fall,monetary policy must

• A) become sufficiently more expansionary to restore the aggregate demand curve to D₀D₀.
• B) contract aggregate demand to be consistent with deficit-reducing fiscal policy.
• C) not lower interest rates and thwart the goal of a balanced budget.
• D) become more contractionary to lower the interest rate and spur investment.

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Definitions:

Social Needs

Refers to the essential human requirements for belonging, love, and interaction with others.

Persistence

The quality of continuing steadfastly despite challenges or obstacles.

Motivation

The method that begins, directs, and sustains actions aimed at achieving objectives.

Process Theories

Refer to models and concepts that explain the dynamics of how processes, such as decision-making or motivation, unfold over time within organizations.