If No Fiscal Policy Changes Are Implemented to Fight Inflation

question 59

Multiple Choice

If no fiscal policy changes are implemented to fight inflation, suppose the aggregate demand curve will exceed the current aggregate demand curve by $900 billion at any level of prices. Assuming the marginal propensity to consume is 0.90, this increase in aggregate demand could be prevented by:

• A) increasing government spending by $500 billion.
• B) increasing government spending by $140 billion.
• C) decreasing taxes by $40 billion.
• D) increasing taxes by $100 billion.

Understand the principle of stare decisis and its application in case law.

Distinguish between the jurisdiction of federal and state courts and the types of cases they handle.

Learn about the Supreme Court's role, composition, and the process of judicial review.

Understand the procedures involved in appealing court decisions and the role of appellate courts.

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Definitions:

Prescribe Medications

The act of a licensed medical professional authorizing the use of specific drugs or treatments for a patient to treat or prevent illness.

Electroconvulsive Therapy

A medical treatment involving the induction of seizures in patients under general anesthesia, primarily used for severe depression and certain psychiatric conditions.

Severe Depression

A mental health disorder characterized by deeply entrenched feelings of sadness, hopelessness, and a lack of interest in life, significantly impairing daily functioning.

Systematic Desensitization

A behavioral therapy technique used to reduce phobias and anxieties through gradual exposure to the feared object or situation paired with relaxation exercises.