Which Statement About Fiscal Policy and Aggregate Supply Is Correct

question 133

Multiple Choice

Which statement about fiscal policy and aggregate supply is correct?

• A) The focus of fiscal policy and aggregate supply is to reduce unemployment.
• B) Fiscal policies that influence aggregate supply do not always require tradeoffs between price level and output.
• C) Fiscal policies that influence aggregate supply take less time to implement than do demand-side fiscal policies.
• D) Fiscal policies that influence aggregate supply increase inflationary pressures as output expands.

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Definitions:

Important Resource

A crucial element or input required for the production process or societal functioning.

Immigration

The action of coming to live permanently in a foreign country.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded by consumers at those prices.

Consumer Income

Refers to the total earnings received by consumers, including wages, salaries, benefits, and any other income sources, influencing their purchasing power and spending behaviors.