Which of the Following Statements About Fiscal Policy and Aggregate

question 229

Multiple Choice

Which of the following statements about fiscal policy and aggregate demand is (are) correct? I. A reduction in unemployment compensation would increase aggregate demand.
II) An increase in government spending would increase aggregate demand.
III) An increase in government spending would increase aggregate demand and lead to a permanent increase in aggregate output if government spending is implemented when the economy is in long-run equilibrium.

• A) I only
• B) II only
• C) II and III only
• D) I and III only

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Definitions:

Market Development Area

A specific geographic or demographic region identified for potential growth or expansion of a company's products or services.

Sales Quota

A specific sales target set for a salesperson or team to achieve within a defined time frame.

Break-even Volume

The quantity of products or services a business needs to sell to cover its costs, without making a profit or loss.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.