If a "Conservative" Wanted to Increase Aggregate Demand, Which of the Following

question 140

Multiple Choice

If a "conservative" wanted to increase aggregate demand, which of the following would he or she tend to favor?

• A)An increase in government spending, because it has a larger multiplier than tax changes.
• B)A decrease in transfer payments, because it keeps the public sector small.
• C)An increase in transfer payments, because it has a larger multiplier than tax changes.
• D)A decrease in taxes, because it makes the public sector smaller.

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Definitions:

Hedonistic Principle

The idea that individuals seek pleasure and avoid pain, guiding much of human behavior and decision-making.

Financial Crisis

A situation where the value of financial institutions or assets drops rapidly, leading to widespread economic disruption.

UN Global Compact

A voluntary initiative based on CEO commitments to implement universal sustainability principles and to take steps to support UN goals.

Regulatory Agency

A governmental body responsible for enforcing laws and regulations to protect public health, safety, environment, and to ensure fair market competition.