To Eliminate an Inflationary Gap Using Fiscal Policy,the Government Could

question 84

Multiple Choice

To eliminate an inflationary gap using fiscal policy,the government could

• A)increase taxes.
• B)increase government expenditure on goods and services and simultaneously increase taxes by an equal amount.
• C)increase government expenditure on goods and services and simultaneously decrease taxes by an equal amount.
• D)decrease the quantity of money.
• E)only decrease taxes.

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Definitions:

Merchantable Quality

Refers to the basic level of quality and functionality that consumers can reasonably expect from a specific good being sold.

Warranty

A guarantee, typically provided by a manufacturer or seller, assuring certain conditions or qualities of a product or service.

Security Interest

A legal claim on assets granted to a creditor to secure a loan, providing the creditor rights to the collateral if the debtor defaults.

Encumbrances

Legal claims or liens on a property or asset that may affect the title or restrict the owner's ability to use the property freely.