If the Government Wants to Engage in Fiscal Policy to Increase

question 171

Multiple Choice

If the government wants to engage in fiscal policy to increase real GDP, it could

• A) increase government expenditure in order to increase short-run aggregate supply.
• B) decrease government expenditure in order to increase short-run aggregate supply.
• C) increase government expenditure in order to increase aggregate demand.
• D) decrease government expenditure in order to decrease aggregate demand.

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Definitions:

Tactics

Specific actions or strategies designed to achieve a particular short-term goal.

Mutual Gains

Benefits that are shared or enjoyed by all parties involved in a negotiation, agreement, or cooperative effort.

Concessions

Acts of yielding or compromising in a negotiation, where one party agrees to give up part of their demands to reach an agreement.

Proposal

A plan or suggestion put forward for consideration or discussion by others.