Suppose That Consumer Spending Is Expected to Decrease in the near Future

question 96

Multiple Choice

Suppose that consumer spending is expected to decrease in the near future. If output is at potential output, which of the following policies is most appropriate according to the AS/AD model?

• A)An increase in government spending
• B)An increase in taxes
• C)A reduction in government spending
• D)No change in taxes or government spending

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Definitions:

Middle Adulthood

A stage of adulthood typically considered to occur from around age 40 to 65, characterized by stability, maturity, and generativity.

Body Transcendence

The psychological process of transcending physical limitations or body concerns, often associated with aging or spiritual growth.

Body Preoccupation

An excessive focus on the body and its appearance, which can impact an individual's self-esteem and behaviours.

Late Adulthood

Late adulthood is a life stage that describes individuals typically aged 65 years and older, characterized by both physiological and cognitive changes, and the consideration of issues such as retirement and coping with physical decline and loss.