A Specific Reduction in Government Spending Will Dampen Demand-Pull Inflation

question 201

Multiple Choice

A specific reduction in government spending will dampen demand-pull inflation by a greater amount the

• A)smaller is the economy's MPC.
• B)flatter is the economy's aggregate supply curve.
• C)smaller is the economy's MPS.
• D)less is the economy's built-in stability.

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Definitions:

Plowshares

Tools used in farming for cutting and turning over the soil, often symbolically mentioned in the context of peace (turning swords into plowshares).

Term Paper

An extensive research paper written by students over an academic term, representing a large portion of their final grade.

Workbook Problems

Exercises and questions found in a workbook intended to practice or test knowledge on a particular subject.

Marginal Rate of Transformation

The rate at which one good must be sacrificed in order to produce an additional unit of another good, assuming constant technology.