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:

Deliberation

The process of carefully considering or discussing different options before making a decision.

Verdict

The decision made by a jury or judge in a court case.

Sentence

A set of words that is complete in itself, conveying a statement, question, exclamation, or command.

Central Route

A term from the Elaboration Likelihood Model referring to the path of persuasion that involves careful and thoughtful consideration of the arguments presented in a message.