Suppose the Economy Is on the Classical Range of the Aggregate

question 107

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:

Pelvic Girdle

Site of attachment of the lower limb to the trunk; ring of bone formed by the sacrum and the coxal bones.

Appendicular

Pertaining to the limbs or extremities of the body, including the bones of the arms, legs, and the girdles (shoulder and pelvic) that attach them to the axial skeleton.

Intervertebral Disk

A layer of cartilage located between adjacent vertebrae in the spine, serving as a shock absorber and allowing for mobility of the spine.

Thoracic Region

The part of the body located between the neck and the abdomen, encasing the heart and lungs within the rib cage.