A Government Might Want to Reduce Aggregate Demand If It

question 149

Multiple Choice

A government might want to reduce aggregate demand if it believes that the economy is

• A) in long-run equilibrium.
• B) above the natural rate of unemployment.
• C) producing below full-employment output.
• D) expanding past its long-run capabilities.
• E) in a recession.

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Definitions:

Igneous Intrusion

The process where magma from the Earth's mantle cuts through or intrudes into the Earth's crust, eventually cooling and solidifying to form igneous rock.

Cross-Cutting Relations

A principle in geology that an igneous intrusion or fault must be younger than the rocks it intrudes or displaces.

Superposition

A principle in geology that states in an undisturbed sequence of rocks, layers on the bottom are older than those above them.

Original Horizontality

A rule indicating that sediment layers are initially laid down in a horizontal manner due to the force of gravity.