Examlex

Solved

The Two Main Tools of Macroeconomic Policy Include Monetary Policy

question 25

Multiple Choice

The two main tools of macroeconomic policy include monetary policy, and fiscal policy, which involves __________ spending.


Definitions:

Potential Output

The maximum amount of goods and services an economy can produce when it uses its resources fully and efficiently, without causing inflation.

Net Taxes

The total taxes paid to the government minus transfer payments and subsidies received from the government.

Aggregate Demand

The total quantity of goods and services demanded across all levels of an economy at a given price level and in a given time period.

Potential Output

The peak level of real GDP that can be maintained in the long run without causing inflation to rise.

Related Questions