What Is the Short-Run Effect of Increased Deficit Spending on an Economy

question 92

Multiple Choice

What is the short-run effect of increased deficit spending on an economy experiencing a recessionary gap?

• A) Aggregate demand increases, and the gap closes.
• B) Aggregate supply increases, closing the gap.
• C) Aggregate demand decreases, and the gap widens.
• D) Aggregate demand will increase, creating an inflationary gap.

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Definitions:

Hybrid Identity

A concept that refers to an individual's integration of their native cultural identity with the elements of another culture, often resulting from migration, globalization, or diaspora.

Ascribed Identity

An identity that is assigned to an individual at birth based on societal norms and expectations, such as race, ethnicity, and gender.

Equity

The principle of fairness and justice in the way people are treated, focusing on providing the resources and opportunities needed to achieve equal outcomes.

Redistributive Justice

The practice or principle of adjusting the distribution of wealth, goods, or resources in a society to achieve fairness or equality.