If the Aggregate Supply Curve Is Flat

question 161

Multiple Choice

If the aggregate supply curve is flat,

• A)expansionary fiscal or monetary policy will cause a good deal of inflation with little increase in real output.
• B)expansionary fiscal or monetary policy will buy large gains in real output at low cost in terms of inflation.
• C)a contractionary stabilization policy is an effective way to reduce inflation.
• D)decreasing the income tax will not shift aggregate demand.

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Definitions:

Capitalism

An economic system where trade, industries, and the means of production are largely or entirely privately owned and operated for profit, often characterized by competitive markets.

Overpopulation

Overpopulation occurs when a species' population exceeds the carrying capacity of its ecological niche, resulting in environmental degradation and diminished quality of life.

Exploitation

The act of treating someone unfairly by using their work or ideas and giving them little or nothing in return.

Workers

Individuals employed to perform tasks or services for compensation.