If a "Liberal" Wanted to Decrease Aggregate Demand, Which of the Following

question 183

Multiple Choice

If a "liberal" wanted to decrease aggregate demand, which of the following would he or she 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 makes the public sector larger.

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Definitions:

Product Line

A group of product or service items that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range.

Cannibalization

A business strategy where a new product eats into the sales of a company's existing products.

New Product

A new product refers to an item or service that has been recently developed and introduced to the market, offering unique benefits or improvements over existing products.

Retail Chain

A series of retail stores owned and operated by the same company, offering a uniform merchandise set to the public.