Suppose That the Correlation Between Government Spending and the Differ-

question 9

Multiple Choice

Suppose that the correlation between government spending and the differ- ence between actual and potential GDP were to become more strongly cor- related; that is, suppose that an increase or decrease in the GDP gap causes an enlarged increase or decrease, respectively, in government spending.

• A) The aggregate demand curve should become steeper because monetary policy is less effective.
• B) The aggregate demand curve should become steeper because monetary policy is more effective.
• C) The aggregate demand curve should become flatter because monetary policy is more effective.
• D) The aggregate demand curve should become flatter because monetary policy is less effective.
• E) There should be no change in the slope of the aggregate demand curve.

---

Definitions:

Protected Class

Groups of people legally protected from discrimination under various federal and state laws.

Sexual Orientation

An inherent or immutable enduring emotional, romantic, or sexual attraction to other people, which can vary and is not limited to heterosexual, homosexual, or bisexual orientations.

Discrimination

Unfair or prejudiced treatment of individuals based on their race, age, sex, nationality, or other protected characteristics.

Title VII

A section of the Civil Rights Act of 1964 that prohibits employment discrimination based on race, color, religion, sex, or national origin.