Which of the Following Fiscal Policy Actions Is Most Likely

question 241

Multiple Choice

Which of the following fiscal policy actions is most likely to increase aggregate supply?

• A)an increase in personal income tax rates
• B)a reduction in interest rates that encourages consumers to purchase more durable goods
• C)an increase in transfer payments to unemployed workers
• D)an increase in government spending on infrastructure that increases private sector productivity

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Definitions:

Organic

Refers to products, especially food or farming methods, that are produced or conducted without the use of synthetic chemicals, fertilizers, or genetically modified organisms.

Profit

The financial gain realized when the amount of revenue gained exceeds the expenses, costs, and taxes involved in sustaining the activity in question.

Long Run Equilibrium

A state in an economy in which all factors of production and inputs can be varied, allowing firms to make adjustments and leading to the normalization of prices and output.

Industry's Adjustment

The process by which industries adapt to changes in economic conditions, technology, or market demands.