Fiscal Policy Is Likely to Fail to Correct Stagflation in an Economy

question 86

Multiple Choice

Fiscal policy is likely to fail to correct stagflation in an economy because:

• A)it affects both aggregate demand and supply,although only aggregate supply needs to be changed.
• B)it affects both the aggregate demand and supply,although only aggregate demand needs to be changed.
• C)it affects aggregate demand only,although aggregate supply needs to changed.
• D)it affects aggregate supply only,although only aggregate demand needs to be changed.
• E)it affects either aggregate demand or aggregate supply,although both need to be changed simultaneously.

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Definitions:

Unadjusted Trial Balance

A preliminary list of all accounts and their balances before any adjustments are made, used to check the accuracy of debits and credits in accounting records.

Accounting Cycle

The sequence of processes beginning with the recording of a transaction and ending with the posting to the financial statements, completed in each accounting period.

End-of-period Spreadsheet

A financial document used to summarize account balances and adjustments at the end of an accounting period, facilitating the preparation of financial statements.

Accounting Records

Documents and books that capture all the financial transactions of a business or individual.