If Government Policymakers Are Shortsighted and Use Monetary or Fiscal

question 62

Multiple Choice

If government policymakers are shortsighted and use monetary or fiscal policy to increase aggregate demand, then they will

• A)encourage growth with little inflation in the long run.
• B)tend to focus on short-run benefits while ignoring the possibility of accelerating inflation in the long run.
• C)be careful to guard against long-run inflation.
• D)All of the above are correct.

---

Definitions:

Net Collection

The amount of money collected by a business or agency after subtracting any refunds, fees, or costs associated with collection.

Overhead Expense

Costs not directly tied to a specific product or service, such as rent, utilities, and administrative salaries.

Occupancy Insurance

A type of insurance policy that provides coverage for losses or damages to a property resulting from its use or occupancy.

Bookkeeping

The systematic recording, organizing, and maintaining of financial transactions for a business.