In Working to Correct a Recession with Fiscal Policy,the Government

question 48

Multiple Choice

In working to correct a recession with fiscal policy,the government can:

• A) wait for wages and prices to become more flexible.
• B) increase the money supply.
• C) increase its expenditures and/or decrease taxes to shift the LRAS curve.
• D) raise its expenditures and/or lower taxes to increase aggregate demand.

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Definitions:

Promise

An assurance that one will or will not do something in the future.

Unilateral Contract

A unilateral contract is a type of agreement in which an offer can only be accepted through performance, meaning one party promises to do something in return for the act of the other party.

Bilateral Contract

A type of contract involving two parties where each side promises to perform an act in exchange for the other party's act.

Bilateral Contract

An agreement where each of the two parties makes a promise or set of promises to the other.