If No Fiscal Policy Changes Are Made, Suppose the Current

question 25

Multiple Choice

If no fiscal policy changes are made, suppose the current aggregate demand curve will increase horizontally by $1,000 billion and cause inflation. If the marginal propensity to consume is 0.75, federal policymakers could follow Keynesian economics and restrain inflation by decreasing:

• A) government spending by $250 billion.
• B) taxes by $100 billion.
• C) taxes by $1,000 billion.
• D) government spending by $1,000 billion.

---

Definitions:

System Restore

A feature in some operating systems that allows a computer to be restored to a previous state, potentially fixing issues by reverting system files and settings.

Task Manager

A system monitor program used to provide information about the processes and applications running on a computer as well as the general status of the system.

Disk Cleanup

A utility software that helps remove unwanted files that accumulate over time on your hard drive, freeing up space and improving system performance.

Print Jobs

Tasks assigned to a printer where documents, images, or files are sent to be printed on paper.