Which of the Following Fiscal Policy Changes Would Be the Most

question 164

Multiple Choice

Which of the following fiscal policy changes would be the most expansionary?

• A)a $40 billion increase in government spending
• B)a $20 billion tax cut and $20 billion increase in government spending
• C)a $10 billion tax cut and $30 billion increase in government spending
• D)a $40 billion tax cut

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Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers, usually downward-sloping to indicate that demand decreases as price increases.

Supply Curve

The supply curve is a graphical representation showing the relationship between the price of a good and the quantity of the good that producers are willing and able to supply in the market.

Price of Beer

The amount of money required to purchase a unit of beer, influenced by factors such as production costs, taxes, and market demand.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that suppliers are willing to produce and sell.