If a "Liberal" Wanted to Increase Aggregate Demand, Which of the Following

question 193

Multiple Choice

If a "liberal" wanted to increase aggregate demand, which of the following would she tend to favor?

• A)An increase in government spending, because it will increase the size of the public sector.
• B)A decrease in transfer payments, because it keeps the public sector small.
• C)An increase in transfer payments, because it has a larger multiplier than tax changes.
• D)A decrease in taxes, because it makes the public sector smaller.

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Definitions:

Stroke

A medical condition occurring when the blood supply to part of the brain is interrupted or reduced, causing brain cells to die due to a lack of oxygen.

Heart Disease

A range of conditions affecting the heart, including coronary artery disease, heart rhythm problems, and heart defects.

Emphysema

A chronic lung disease characterized by overdistension of the alveolar sacs and inability to exchange oxygen and carbon dioxide.

Cyanosis

A bluish discoloration of the skin and mucous membranes due to insufficient oxygen in the blood.