If President Obama Wanted to Decrease Aggregate Demand, Which of the Following

question 97

Multiple Choice

If President Obama wanted to decrease aggregate demand, which of the following would he tend to favor?

• A)An increase in government spending, because it will increase the size of the public sector.
• B)A decrease in government spending, because it keeps the public sector small.
• C)An increase in transfer payments, because it has a larger multiplier than tax changes.
• D)An increase in taxes, because it would not make the public sector smaller.

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Definitions:

Moved Downhill

The process of material, such as soil, rock, or snow, moving down a slope due to gravity, often accelerated by factors like water saturation or earthquakes.

High Percentage

Refers to a substantial or large proportion of a mix, group, or total.

Sand

is a granular material composed of finely divided rock and mineral particles, often used in construction.

Forces and Energy

Fundamental concepts in physics, with forces being interactions that change the motion of objects and energy being the capacity to do work.