If Policymakers Are Concerned That the Economy Is in Danger

question 85

Multiple Choice

If policymakers are concerned that the economy is in danger of rising inflation because aggregate demand is increasing faster than aggregate supply,the appropriate fiscal policy response is to

• A)increase taxes.
• B)increase government spending.
• C)use expansionary fiscal policy.
• D)increase interest rates.

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Definitions:

Negative Correlation

A connection between two factors where as one escalates, the other diminishes.

Mood Disorders

A category of mental health issues that primarily affect a person’s emotional state, such as depression and bipolar disorder.

Profound Creativity

Exceptional or groundbreaking creativity that significantly alters the perception or understanding of a domain or discipline.

Ludwig's Studies

Presumably refers to research or experimental findings by a notable individual named Ludwig, requiring more specific context to accurately define.