Suppose the Economy Is on the Classical Range of the Aggregate

question 82

Multiple Choice

Suppose the economy is on the classical range of the aggregate supply curve and has a problem with inflation. According to Keynesian theory, which of the following is an appropriate discretionary fiscal policy to use in this situation?

• A) A reduction in the money supply.
• B) Less government regulation.
• C) Increase federal spending.
• D) Higher taxes.

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Definitions:

Imitating Behavior

The replication of actions, gestures, or speech patterns of another individual or group, often as a form of learning or social bonding.

Symbolic Thought

The ability to use symbols, signs, or objects to represent something else, which is a key aspect of human language and complex thinking.

Human Experience

The sum of individual and collective perceptions, feelings, thoughts, and interactions throughout one's life.

Social Exclusion

The process or act of rejecting or denying certain individuals or groups access to social interaction or inclusion within a society or group.