Use the Following to Answer Questions

question 53

Multiple Choice

Use the following to answer questions:
-(Figure: Fiscal Policy Options) Refer to Figure: Fiscal Policy Options. If the aggregate demand curve is AD, the most appropriate discretionary fiscal policy is to _____ government spending and _____ income tax rates.

• A) decrease; increase
• B) decrease; maintain
• C) increase; increase
• D) maintain; maintain

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Definitions:

Physical Products

Tangible items that are manufactured, sold, and physically handled by the consumer, in contrast to services or digital goods.

Raw Materials

Basic substances in their natural, modified, or semi-processed states used as inputs for production.

Distribution

The process of making goods or services available to consumers through various channels.

Downstream Activity

Processes in the supply chain that occur after the production phase, such as distribution, marketing, and sales to the end consumer.