Which of the Following Options Could Be Used to Eliminate

question 54

Multiple Choice

Which of the following options could be used to eliminate a recessionary gap?

• A) Increase government spending.
• B) Decrease government spending.
• C) Decrease investment.
• D) Increase taxes.

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Definitions:

Consumer Surplus

It is the difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually pay.

Market Equilibrium

The state in which market supply and demand balance each other, resulting in stable prices.

Producer Surplus

The difference between the amount a producer is willing to accept for a product versus what they actually receive.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers.