Figure 12-3 -Refer to Figure 12-3. If the Aggregate Demand Curve Is

question 10

Multiple Choice

Figure 12-3
-Refer to Figure 12-3. If the aggregate demand curve is AD₁, which of the following is the most
Appropriate discretionary fiscal policy to pursue?

• A) a contractionary fiscal policy involving reductions in government spending and increases in income tax rates
• B) a contractionary fiscal policy involving reductions in government spending and decreases in income tax rates
• C) an expansionary fiscal policy involving increases in government spending and increases in investment tax credits
• D) an expansionary fiscal policy involving increases in government spending and decreases in investment tax credits

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Definitions:

Amortization Period

The total time period over which a loan or a mortgage is scheduled to be paid off through regular payments that cover both principal and interest.

Compounded Semi-annually

A method of calculating interest where the interest amount is added to the principal amount twice a year, leading to compound growth.

Amortization Period

The length of time it takes to fully pay off a debt with regular payments that cover both principal and interest.

Cash-back Mortgage

A type of mortgage where the borrower receives a cash rebate upfront, often used for home improvements or debt consolidation.